Trial Exposed Frankel’s Wealthy, Wacky Lifestyle

February 2, 2003

By Vesna Jaksic

He had some employees sign sex slave contracts, paged them each morning when he wanted a ginger ale and screamed when they made mistakes on documents.  But Martin Frankel also was a boss who couldn’t say no to workers, a boyfriend who often got punched by his girlfriends and an eccentric man who couldn’t stop rambling.

From Frankel’s finicky eating habits to his faith in astrology, several former employees have painted a bizarre picture of the mastermind behind one of the nation’s biggest white-collar crimes – a $208 million insurance scam. Details about the rogue financier and the offbeat world on his backcountry Greenwich compound emerged during the 2 1/2 week trial of his former office manager Mona Kim.

A federal jury took less than three hours Thursday to convict Kim of wire fraud, money laundering, racketeering and conspiracy for her role in Frankel’s scheme.

Kim, 37, was among a number of women who lived at 881 Lake Ave., a short walk from Frankel’s 889 Lake Ave. residence. The house at 889 Lake Ave. also was the headquarters for Frankel’s fraudulent business, which looted millions from insurance companies in five southern states.

Guards patrolled the property, motion-detecting cameras surveyed the house and sophisticated lock systems limited access to certain rooms. Some of the women said Frankel’s security chief did a background check on them before they were allowed to set foot on his compound.

Frankel’s business, fraudulent though it was, seems to have been run with quite a bit of formality. Employees in the same house often communicated with typed memos and an office messaging system called WinPops, on which users type messages that pop up on computer screens. Charts were used to organize work schedules.

“Everybody was required to carry a pager and a cell phone,” said Karen Timmins, a former office manager who testified against Kim and one of Frankel’s closest associates.

There also was an elaborate organizational system. Typed phone lists were displayed in almost every room to keep track of the numerous phone lines. In Frankel’s “trading room,” there was a separate phone line for a “guest chair,” as well as Frankel’s “right” and “left” chairs. Another line was for “Marty’s emergency use only,” according to documents shown in court.

A binder was used to keep information on the fleet of luxury cars used by employees. Frankel followed the same routine each day. The financier rose between 9 and 9:30 a.m., his aides said. He then used a paging system to request ginger ale and ice, which employees took turns delivering to him. He spent most of the day in his “trading room,” often getting employees to bring him Chilean sea bass, ginger ale and Evian-brand bottled water.

The trading room had more than 20 computer screens and hook-ups to stock information services. Monitors and television screens were just about everywhere, including the top of a bathroom counter and the ledge of a bathtub.

But Frankel never traded. He wired his insurance companies’ assets to his Swiss bank account. Then he fled the country in May 1999, when insurance regulators began uncovering his nearly-decade long scam.

After a highly publicized international manhunt, authorities captured the Ohio native in Germany in September 1999. He later pleaded guilty to 24 federal charges in the U.S. District Court in New Haven. Frankel, 48, is awaiting sentencing in a Rhode Island prison. Ten of his associates, including Timmins, also pleaded guilty. One is still a fugitive.

Except for chefs and some security guards, none of Frankel’s employees received a salary, witnesses said. Instead, they put in money requests for “just about anything” and often were paid with American Express traveler’s checks, said Timmins, who was in charge of expense reports.

By the time investigators caught onto Frankel in 1999, he had issued more than $9 million in traveler’s checks, according to an FBI agent. Timmins said she often had to deny the money requests because Frankel couldn’t. “Everybody knew he couldn’t say no,” she said.

Frankel met Kim, Timmins, his former house manager Alicia Walters and a number of other women through sadomasochism ads. Timmins testified that she adopted a daughter as part of a plan to raise infants to be Frankel’ sex slaves. When she moved to Greenwich in the summer of 1996, she signed a slave contract, in which she promised to devote her mind and body to Frankel, she said.

“I know that it will please you, Marty, to push me beyond my limits, to push me to the point where I may beg you to stop; if this happens – if I ever cry out to be released from being your captive – I ask that you do whatever you wish with me; I want you to keep me enslaved, I want to learn that I am truly owned by you; I beg you to use me for your pleasure, in any way you want,” the contract said.

But Timmins, Walters and Kim said they never had sex with Frankel. And yet, all three testified that they had some feelings for the tall and lanky man with glasses who preferred baggy jeans and white T-shirts over business suits.

Frankel sought submissive women through personal ads, but he was actually a pushover and had little control over them, Timmins said. Kim testified that Frankel told her all of his girlfriends had hit him at some point in their relationships.

When it came to authority on the compound, however, there is little dispute that Frankel exercised great control. In dozens of memos that referred to Frankel as “Boss,” he issued orders on everything from where a humidifier should be placed to what type and font size should be used in WinPops. When Kim made a mistake by mailing the wrong documents, he became furious.

“He called me at 2 o’clock in the morning, screamed at me because they were wrong,” Kim said, adding that Frankel sent an employee in a private jet to deliver the correct documents. “It was an expensive mistake.”

Several former Frankel aides talked about his  need to be isolated. When he was in his trading room, nobody was allowed to disturb him, they said. In one memo, Frankel reminded his staff not to engage him in small talk or greet him in the hallway.

“Nobody was allowed to look at him, say hello to him, unless he engaged you first,” Kim testified.

Walters said you could only get information from Frankel if he wanted to give it to you.

“You don’t ask Marty questions,” she said. “That’s just the way it is.”

At the same time, Frankel was a rambling talker who could go into spiels on just about everything, his aides said. One of his assistants once sent a memo on Frankel’s behalf reminding the staff to limit telephone conversations with him because he could not. In several recorded conversations played at the trial, Frankel babbled and interrupted his business associates.

The financier liked to learn details of his employees’ lives and enjoyed fostering competition between the women so he could watch them quarrel, witnesses said. He was curious about many things, Kim said, referring to a memo that discussed Frankel’s interest in acquiring a hairless dog and another one about getting fish for his water tanks because he believed in Feng Shui, the Chinese practice of arranging objects to harmonize with spiritual forces.

Frankel also had a penchant for astrology. When he met Kim, he prepared an astrological chart on her to see if they were compatible, she said. He often picked astrologically significant dates to make decisions, witnesses said.

When authorities began closing in on his criminal syndicate, Frankel relied on astrological charts to answer questions such as “Will they catch me?” and “Will I go to prison?”