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U.S. Seeks Financier’s Extradition

September 6, 1999

HAMBURG, Germany (AP) _ After four months of pursuit, international authorities caught up with suspected embezzler Martin Frankel at a comfortable waterfront hotel where he had been staying for eight weeks.

The capture Saturday was as undramatic as the disarming, casual manner Frankel allegedly used to con millions of dollars from investors.

Using a pass key, German and U.S. authorities let themselves into Frankel’s room. The man who had evaded authorities for months didn’t resist, saying: ``You got me,″ according to FBI Special Agent Michael Wolf in Greenwich, Conn.

Frankel, 44, was being held while U.S. officials work on an extradition request that could take several months. He faces charges of money laundering and wire fraud.

He was brought before a judge late Saturday and ordered held on the international arrest warrant as well as a German charge of using a fake British passport, Hamburg police spokesman Wolfgang Ketels said.

Police say Frankel is responsible for a lengthy trail of deception _ bilking insurance companies out of millions and receiving donations for a bogus foundation set up with the help of the Vatican. The Vatican has denied any connection to the scandal.

He showed an impressive biography to hook investors, claiming to have a foolproof system for making money off safe government securities.

The search for Frankel started May 5 after firefighters responding to an alarm at his $3 million mansion in Greenwich found a blazing file cabinet and two fireplaces stuffed with burning documents. An arrest warrant was issued for Frankel on July 14.

Insurance company regulators said his unlicensed brokerage had siphoned at least $218 million from several insurance companies. A lawsuit filed by some of the companies puts the loss at $915 million.

Also missing is as much as $1.98 billion from the St. Francis of Assisi Foundation, which investigators say was established by Frankel last August in the British Virgin Islands.

Frankel has been described by some investors as the Hugh Hefner of high finance, living with women he met through personal ads, some of whom also worked in his office.

It was not immediately clear why Frankel came to Germany. Police said he checked into Hamburg’s Prem hotel about eight weeks ago using a phony name.

Frankel was believed to have been in Italy earlier this summer. He may have been financing his run with more than $10 million in diamonds and gold he bought before disappearing.

Authorities seized an unspecified sum of cash, diamonds and a computer in his hotel room, Wolf said. Hamburg police spokesman Hans-Juergen Petersen said Frankel also had ``a number of passports″ with him.

Frankel was accompanied by a woman, identified by the FBI in Connecticut as Cynthia Allison, 35. Allison was traveling under the alias Susan Kelly, according to the FBI, which did not elaborate on her relationship to Frankel.

Petersen said the woman was taken into custody but was later released.

Hugh Keefe, Frankel’s U.S. lawyer, said he has spoken to Frankel’s German lawyer, who told him that ``under the circumstances, Marty seemed to be OK.″

Keefe also said he had spoken to Allison, who disputes authorities’ version of the arrest. She said no FBI agent was present and that Frankel never said ``You got me.″

Under German law, the United States has 40 days from the time of arrest to make an extradition request, but can also get a 20-day extension. The case will be heard by the highest state court in Hamburg, but extradition is decided by the Justice Ministry.

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