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Marty Frankel – The Master of Manipulation Who Turned Astrology Into a $200 Million Fraud

Martin.R.Frankel (born 1954) is one of the most unusual and destructive financial criminals in modern American history, a man whose elaborate schemes combined astrology-based investment decisions, false identities, fabricated financial statements, misuse of religious institutions, and manipulation of corporate structures to steal more than $200 million from insurance companies across multiple states. Born to Leon and Tilly Frankel and raised in a Jewish household, Frankel showed early signs of brilliance mixed with deep insecurity and obsessive behavior. After attending but not graduating from the University of Toledo, he drifted into the world of financial trading despite lacking the discipline to execute trades, often relying on astrology to determine market activity. His inability to make actual trades caused repeated friction with brokerage firms, and after being fired by broker John Schulte in 1986, he unexpectedly convinced Schulte’s wife, Sonia, to leave her marriage and join him both romantically and professionally. Under the alias James Spencer Frankel established Winthrop Capital and simultaneously launched the Frankel Fund with Douglas Maxwell. Despite presenting himself as a financial mastermind, Frankel continued to use client funds to support his personal life, cover business expenses, and secretly funnel money to family members. By mid-1988, he was running what was effectively a Ponzi scheme, raiding some customers’ accounts to repay others, and when the structure began collapsing, he blamed his partner Maxwell, claiming fabricated losses and embezzlemen.According toCTpost:

 

The accounts did not exist. Instead, Frankel fabricated brokerage statements, created counterfeit trade confirmations, and used the funds to support an extravagant lifestyle, pay off associates such as Hackney (who personally received over $8 million), and cover personal expenses ranging from real estate to travel. Hackney, fully aware of Frankel’s control, submitted false quarterly and annual reports to the SEC to hide Frankel’s involvement, misrepresent FAC’s investment revenues, conceal related-party transactions, and deceive auditors. The fraud deepened for nearly a decade until it finally unraveled in 1999, prompting Frankel to flee the United States using a private jet. He first traveled to Rome and then hid in Hamburg, Germany, where he was arrested on September 4, 1999. Before being extradited, he was convicted in Germany for passport fraud and sentenced to three years. After being returned to the U.S. in 2001, federal authorities indicted Frankel and more than fifteen associates, including Colagiovanni and Sonia Schulte (by then Sonia Howe). In May 2002, Frankel pleaded guilty to 24 federal charges including securities fraud, wire fraud, racketeering, and conspiracy. During his 2004 sentencing, Frankel attempted to portray himself as mentally ill and argued that his crimes arose from an obsessive desire to provide for Sonia and her children, even telling the judge that punishing a mentally ill person could not serve as a deterrent because “it won’t stop other mentally ill people from doing it.” The judge rejected his reasoning, famously responding, “So, you stole $209 million to take care of the children?” Frankel was sentenced to 200 months—more than sixteen years—in federal prison, and Tennessee imposed an additional 16-year sentence to run concurrently.