ARK. EXECS. CHARGED IN FRANKEL CASE

Arkansas Insurance Commissioner Mike Pickens and Pulaski County Prosecuting Attorney Larry Jegley announced three insurance agents have been charged in connection with Martin Frankel’s alleged theft of $200 million from several insurance companies in the South. Tennessee residents Gary Atnip, Billy D. Williams, and Wade A. Willis, all officers of the Franklin American Life Insurance Co. based in Tennessee and the parent company of Old Southwest Insurance Co. of Jacksonville, Ark, aresuspected of having transferred Old Southwest funds without the permission of the Arkansas Insurance Commissioner, a violation of Arkansas Insurance Code Sec. 23-69-134. According to regulators six days following Franklin American’s acquisition of Old Southwest, the three defendants signed paperwork to transfer $5.3 million from Old Southwest’s Arkansas bank to a Tennessee bank, leaving only $19,175 in the company’s account. The money was transferred the same day from the Tennessee bank to one in New York City, and then to an overseas account, according to prosecutors. Prosecutors contend that the defendants’ actions illegally removed the insurer’s deposits from Arkansas without permission from state regulators, and resulted in Old Southwest’s insolvency. Marty Nevrla, Director of the Arkansas Insurance Fraud Investigation Division, said the investigation and the charges are part of a larger federal investigation. The felony charges filed in this case carry a maximum term of five years imprisonment, and a maximum fine of $10,000, if a conviction is obtained. According to Best Wire, Atnip faces federal charges in Connecticut, where he is accused of conspiring with Frankel to conceal Frankel’s control of Thunor Trust, the entity the latter used to control the insurers. Atnip acted as the CFO for the companies Frankel controlled. Atnip is also accused of concealing Frankel’s secret ownership of brokerage LNS Inc., where all the insurance assets were sent. Frankel pleaded not guilty to stealing $200 million from several insurance companies. Besides criminal charges, he faces a civil suit filed by the U.S. Securities and Exchange Commission, which attempts to recoup the funds he allegedly stole from a handful of insurers, including Franklin Protective Life Insurance Co., Family Guaranty Life Insurance Co. and First National Life Insurance Company of America.

Topics Tennessee Arkansas