Frankel Legacy Lives On

Moore's Jacksonville Funeral Home, Chapel Hill Memorial Park and Old Southwest Life Insurance have been dismissed without prejudice as plaintiffs in a lawsuit against several Little Rock attorneys and accountants.

The suit alleges the defendants engaged in conflict of interest, breach of contract and accounting malpractice in the 1999 purchase of Old Southwest by Franklin American Life Insurance Co., involving former fugitive investment broker Martin Frankel.

Two remaining plaintiffs, Moore's Investment Company Inc. and Jimmie Lee Moore Jaye, individually and as attorney for her mother, Westelle Kemp Moore, remain as plaintiffs in the case that is scheduled to go to trial on Feb. 4.

Defendants named in the suit are Mitchell Williams Selig Gates & Woodyard PLLC, Stanley D. Smith, Jeffrey Thomas, Cathey & Associates PA and Mark R. Cathey CPA.

Back Drop Info

In December 2001, the state Insurance Department filed charges against three Tennessee men for the illegal transfer of $5.3 million from Franklin American Life Insurance Co., parent company of Old Southwest, a burial insurance company.

The men were suspected of taking part in a fraud scheme masterminded by Frankel, who was convicted of swindling more than $200 million from several Southern insurance companies.

The transfer gutted the reserves of the 40-year-old Jacksonville company and made Arkansas a minor player in a huge scandal.

The controversy broadened to include $350 million in missing insurance assets, ensnared Catholic charities tied to the Vatican and spawned an international manhunt for Frankel.

Frankel, who was captured in Europe in June 2000, pleaded guilty to overseas chicanery and was sentenced to three years in a Hamburg, Germany, jail.

He returned to the United States last year and pleaded guilty in May to federal charges including securities fraud and racketeering. Sentencing is scheduled for later this year.

Another participant in the scheme pleaded guilty on Sept. 5 in U.S. District Court in New Haven, Conn., to conspiracy to commit fraud and money laundering.

Msgr. Emilio Colagiovanni, an 82-year-old retired Roman Catholic Church official who had served as a Vatican expert on church law, admitted lying to regulators about Frankel's bogus charity, St. Francis of Assisi Foundation.