International Swindle Guts Old Southwest

by Michael Whiteley  on Monday, Mar. 31, 2014 12:00 am  

The merger was postponed, he says. Then the company’s assets were removed from Arkansas with Hackney’s knowledge and absent Pickens’ permission — a felony in Arkansas.

The money was almost immediately transferred to the “Dreyfus Account” at the Bank of New York, an account controlled by Frankel and Liberty National Securities. Arkansas regulators aren’t sure where it went from there.

Virginia regulators spelled out a strikingly similar transfer three days later from Settlers Life, a life insurance handling re-insurance for Hackney’s First National Life in Mississippi.

Regulators say nearly $44.8 million left Settlers accounts in Charlotte, N.C., at 11:32 a.m. on April 9, lingered in First National’s bank account in Tennessee, and left again about three hours later for the Dreyfus Account in New York.

On April 12, the exact amount of the Settlers transfer plus $17,640.49 in weekend interest was wired to an account controlled by Frankel in Switzerland.

Frankel disappeared from his home in Connecticut on May 4, when, The Wall Street Journal reports, he flew out of the small airport in White Plains, N.Y., and eventually landed in Rome.

With Frankel gone, Mississippi regulators placed First National Life, Family Guaranty Life Insurance Co. and Franklin Life Insurance Protective Life Insurance Co. into rehabilitation on May 10, triggering a string of regulatory actions across the U.S.

Anderson said he learned of the wire transfer on May 13. Four days later, Arkansas moved in and took control of Old Southwest. He says the department has a chance of recovering the money and doesn’t think it went to Switzerland.

He and Pickens are not sure who — if anyone — to blame for the losses.

“I’d give anything if we had received a Form A [application] with St. Francis of Assisi or information like this on it,” he says of the Colorado documents. “But we didn’t.”

Since Then ...

2014: Martin Frankel was caught in Germany in June 2000. He pleaded guilty to 24 federal felonies and was sentenced in 2004 to serve almost 17 years. He is incarcertated at the federal prison at Fort Dix, N.J., with an anticipated release date of Sept. 7, 2015.

In 2008, Arkansas finally received $1.3 million from the $72 million in assets seized from Frankel. The money was used to reimburse the Arkansas Life & Health Insurance Guaranty Association and other creditors of Old Southwest.

 

 

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