Missing: One Man, Many Millions

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From Liberty National he issued statements that helped assure insurance-company trustees that they were receiving fantastic returns on U.S. Treasury bonds. Meanwhile, he funneled the money, as much as $915 million, through a series of foreign bank accounts and a tangled web of entities still being sorted out by federal investigators.

But how was it that the bumbling, barred-by-the-SEC Frankel was able to take control of insurance companies, particularly when he had virtually no assets? Oklahoma insurance commissioner Carrol Fisher is as surprised as anyone. "I don't know how in the world this could have happened," she said. "To imagine how one person could have got hold of this much money is beyond me."

Having baked a layer cake of fraud, Frankel sought to add some icing by establishing a charitable trust with connections to the Vatican--the ultimate cover. Through a prominent New York City attorney, Thomas Bolan, Frankel met with Father Peter Jacobs, a gadabout clergyman who has ties to New York luminaries, including Walter Cronkite. Jacobs introduced Frankel to Monsignor Emilio Colagiovanni, a Vatican official. Frankel claimed that his St. Francis of Assisi Foundation would distribute more than $2 billion to Catholic charities. He took to obsessively studying the lives of the saints, almost as avidly as he consulted astrological charts. He got the monsignor's blessing--and the use of a Vatican bank account controlled by Colagiovanni.

While his ultimate aspirations for the St. Francis Foundation are not clear, the fund was his scam's undoing. State regulators balked when the Virgin Islands-registered Foundation sought to take over U.S. insurance companies. But by early May, when Mississippi and Tennessee regulators began seeking the return of assets from Frankel's Liberty National, Frankel was gone, leaving behind, among other things, a half-million-dollar charge for jet fuel on his credit card. At his house, FBI agents recovered astrological charts intended to answer, among other questions, "Will I go to jail?"

For now, no. Frankel remains at large. He is presumably the only person who knows the whereabouts of the missing $335 million. As the cops discovered, he's an information junkie. And it's likely that somewhere among the burned papers and the many computers, they'll find his research on countries that have loose banking laws, nice beaches or mountains--and no extradition treaties with the U.S.