Insurance Fraud Insurance Fraud example essay topic

Insurance Fraud Insurance Fraud is becoming one of the top forms of fraud in America. Martin Frankel owned several mansions, luxury cars, and diamonds. He lived a life of complete luxury. A life of luxury that was paid for with money stolen through insurance fraud.

Martin Frankel is one of the major contributors to insurance fraud. He constructed a scheme to embezzle over 200 million dollars from insurance companies in several states across the U.S. He began his first minor case of insurance fraud in 1986 and was not convicted until 2002 for insurance fraud, racketeering, and money laundering. Throughout his "career" he learned new ways to embezzle money and began to master the art of insurance fraud. Insurance fraud cost Americans billions of dollars every year as higher premium. It is viewed as mostly as a white-collar crime but it can come in many different forms. People who usually commit these kinds of frauds are motivated by greed for necessity or seeking wealth and luxury.

This may have been the case with Martin Frankel as stated by the prosecutors "he was motivated by greed, sexual desire and a lust for the high life: a mansion in Greenwich, fancy cars, diamonds the size of nickels, and several girlfriends". In 1986 convince a businessman named Douglas Maxwell to join him in establishing the Frankel Fund. The Frankel Fund was an investment partnership in which the limited partners had to invest at least $50,000 each. In 1991 the Frankel Fund failed and the Securities and Exchange Commission banned him from dealing with securities business for life.

After that he using false names he set up the Creative Partners Fund LP. This fund was another scam like the Frankel Fund but the minimum investment was only $10,000 and it spread through a much broader base of investors. He and his partner Sonia Schulte formed a thun or trust to purchase insurance companies that where in financial trouble. Martin Frankel made his millions from keeping the very large reserves from the purchased insurance companies and spending it for luxuries instead of investing it and buy securities.

He built a large false insurance empire through using the reserves to buy more and more insurance companies and then transferring the money from company to company to look as if the money remained untouched. He called his scheme the Ponzi scheme after Charles Ponzi who became rich from a pyramid scheme. Over the next few years the thun or trust purchased many new insurance companies with about $434 million dollars in assets. Martin Frankel was a part of a fraudulent insurance empire that lasted about 15 years.

In May of 1999 he fled to Germany with two of his mistresses and was later arrested at a hotel in Hamburg. Frankel pleaded guilty to twenty-four federal charges for fraud, racketeering, and even cooperated with authorities to bring other defendants to justice. He claimed that his fraudulent activities were to benefit his girlfriend and the children. Martin Frankel was one of the seventeen people involved in this scheme and all but one, who is a fugitive, were convicted.

Frankel was sentenced to sixteen years in prison for charges listed above. According to Attorney Kevin O' Connor "I hear remorse, yet I hear him blaming everybody but himself,"Whatever he feels today, he's $200 million and 15 years too late".

Bibliography

Frankel Gets 16 Years for Insurance Fraud. ' Associated Press 2004.
bell, Rachael. 'MARTIN FRANKEL: SEX, GREED AND $200 MILLION FRAUD. '. 2004.
Crime Library. 2004.
Pollock, Joan. Martin Frankel. 11 December 2004.
13 December 2004.