The Norman Transcript

State/Region

September 29, 2012

Miss. ending insurance fraud suit

JACKSON, Miss. — State officials are dropping the remnants of an 11-year-old lawsuit after collecting as much money as they think they can get in reparations for insurance fraud by a convicted financier who claimed Vatican ties.

Attorneys for Mississippi Insurance Commissioner Mike Chaney filed a motion Wednesday in U.S. District Court in Jackson, Miss., that seeks to voluntarily dismiss the last three defendants, including an elderly priest. Claims against the Vatican were dropped earlier this year. A judge has not ruled on the motion.

The lawsuit originally was filed in 2001 by Cheney’s predecessor, George Dale, after financier Martin Frankel bilked insurers in five states out of $200 million during the 1990s. Insurance regulators in Tennessee, Oklahoma, Arkansas and Kansas joined the lawsuit.

Frankel is in prison after pleading guilty to 24 counts of fraud and racketeering.

The last defendants in the lawsuit were Monsignor Emilio Colagiovanni, a priest in his 90s, the Monitor Ecclesiasticus Foundation, and Endurance Investments, Ltd. The motion said $154 million was recovered from other sources.

Several attorneys involved the case have not responded to messages seeking comment.

“Each of the remaining defendants is considered uncollectible ... Therefore, Plaintiffs have determined it is not economically justified to engage an expert and take the Court’s time to prove up damages and seek a default judgment,” the motion said.

Frankel, who had already been barred from securities trading, bought small insurance companies in the 1990s, often using an alias, David Rosse, and third parties to hide his involvement. He would buy a company, loot it, and then use some of the money to buy another one. The companies were left insolvent, and their policies were taken over by other insurers.

Frankel came to believe the Roman Catholic Church could help bring the appearance of legitimacy to his scheme.

Frankel cultivated a relationship with Colagiovanni and formed a charity, the St. Francis of Assisi Foundation to Serve and Help the Poor and Alleviate Suffering, and set it up in the British Virgin Islands in 1998 to deceive regulators about the source of money he was using to buy insurance companies, court records said.

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