29-01-2010, 10:42 AM
Missouri regulators sue Vatican
By MARK MORRIS
The Kansas City Star
Missouri regulators have sued the Vatican, alleging that Roman Catholic Church officials conspired to launder millions of dollars looted in one of the largest scandals to rock the U.S. insurance industry.
Joining officials from four other states, the Missouri Department of Insurance filed the federal lawsuit late Thursday in Jackson, Miss., seeking to recover more than $200 million from the Vatican.
The lawsuit stems from an alleged scam headed by financier Martin Frankel, who is charged with racketeering in Connecticut. Frankel is accused of buying insurance companies, including one registered in Missouri, then siphoning the insurers' cash reserves and using them to purchase mansions, cars, diamonds and gold.
He has pleaded not guilty and is awaiting trial.
Frankel fled to Germany in 1999 after Mississippi insurance regulators began asking questions about a charity with ties to the Vatican that Frankel had allegedly used as a "front" to purchase insurance companies.
Randy McConnell, a spokesman for the Missouri Department of Insurance, said suing the the Vatican was not a step the state took lightly.
"There were people in the Vatican acting in a secular capacity that helped facilitate Frankel and his scheme," McConnell said. "All we are asking from this lawsuit is that the Vatican, in its secular capacity, be held to the same standards as other people and institutions."
The Vatican's embassy in Washington D.C., declined to comment and referred questions to its press office in Rome, which was closed Friday.
In a 1999 statement, however, the church said that neither the charity nor another foundation that also is a defendant in the lawsuit fell under the Vatican's jurisdiction.
According to the lawsuit, Frankel's connection to the church was Monsignor Emilio Colagiovanni, a senior member of the Curia, or Vatican government, and an appellate judge in the church courts. In the late 1990s, Colagiovanni was the president of Monitor Ecclesiasticus, a religious and charitable foundation that publishes the decisions of Vatican courts.
Colagiovanni has been charged with wire fraud and money laundering, and is free on bond.
His attorney, John R. Gulash, declined to comment on the lawsuit or the charges against Colagiovanni.
According to the lawsuit, Frankel established a charity -- the St. Francis of Assisi Foundation to Serve and Help the Poor and Alleviate Suffering -- that he would use to acquire insurance companies, using money that he already had looted in prior insurance schemes.
Colagiovanni allegedly used his foundation to make it appear as if St. Francis' funding came from Vatican sources, and assured others that St. Francis was legitimate.
"(Colagiovanni) used his position as a member of the Curia to convince state government officials and insurance companies in the United States that St. Francis was connected with the Vatican through Monitor Ecclesiasticus, and that St. Francis was a Vatican-funded initiative," the lawsuit contends.
In return, Frankel agreed to transfer $5 million to a Monitor Ecclesiasticus account that Colagiovanni controlled, according to the lawsuit.
Colagiovanni also is alleged to have escorted executives from an insurance company on a private Vatican tour to assure them that St. Francis had received Vatican money.
The lawsuit further alleges that senior Vatican officials approved the scheme and took no action to repudiate Colagiovanni's misrepresentations.
"High-ranking officials at the Vatican authorized or ratified the plan whereby Monitor Ecclesiasticus would be used as a conduit for the flow of Frankel's money to St. Francis to purchase U.S. insurance companies, which St. Francis claimed a `Vatican tie.' "
The insurance commissioners of the five states are already seeking more than $600 million in damages from Frankel in a lawsuit filed in 2000. The latest lawsuit was filed under federal racketeering statutes, which allow for actual damages to be tripled. A final judgment in this case could top $600 million.
Missouri officials became involved in the case when a company registered in the state, International Financial Services Life Insurance Co., was declared insolvent in May 1999.
Frankel acquired International Financial Services through a holding company in 1994. International Financial Services was registered in Missouri but had no offices there. It was licensed to provide modest burial plans in 40 states, but it had only one licensed agent in Missouri.
Officials have estimated that the company lost $57 million in the scam.
To reach Mark Morris, federal courts reporter, call (816) 234-4310 or send e-mail to mmorris@kcstar.com.
By MARK MORRIS
The Kansas City Star
Missouri regulators have sued the Vatican, alleging that Roman Catholic Church officials conspired to launder millions of dollars looted in one of the largest scandals to rock the U.S. insurance industry.
Joining officials from four other states, the Missouri Department of Insurance filed the federal lawsuit late Thursday in Jackson, Miss., seeking to recover more than $200 million from the Vatican.
The lawsuit stems from an alleged scam headed by financier Martin Frankel, who is charged with racketeering in Connecticut. Frankel is accused of buying insurance companies, including one registered in Missouri, then siphoning the insurers' cash reserves and using them to purchase mansions, cars, diamonds and gold.
He has pleaded not guilty and is awaiting trial.
Frankel fled to Germany in 1999 after Mississippi insurance regulators began asking questions about a charity with ties to the Vatican that Frankel had allegedly used as a "front" to purchase insurance companies.
Randy McConnell, a spokesman for the Missouri Department of Insurance, said suing the the Vatican was not a step the state took lightly.
"There were people in the Vatican acting in a secular capacity that helped facilitate Frankel and his scheme," McConnell said. "All we are asking from this lawsuit is that the Vatican, in its secular capacity, be held to the same standards as other people and institutions."
The Vatican's embassy in Washington D.C., declined to comment and referred questions to its press office in Rome, which was closed Friday.
In a 1999 statement, however, the church said that neither the charity nor another foundation that also is a defendant in the lawsuit fell under the Vatican's jurisdiction.
According to the lawsuit, Frankel's connection to the church was Monsignor Emilio Colagiovanni, a senior member of the Curia, or Vatican government, and an appellate judge in the church courts. In the late 1990s, Colagiovanni was the president of Monitor Ecclesiasticus, a religious and charitable foundation that publishes the decisions of Vatican courts.
Colagiovanni has been charged with wire fraud and money laundering, and is free on bond.
His attorney, John R. Gulash, declined to comment on the lawsuit or the charges against Colagiovanni.
According to the lawsuit, Frankel established a charity -- the St. Francis of Assisi Foundation to Serve and Help the Poor and Alleviate Suffering -- that he would use to acquire insurance companies, using money that he already had looted in prior insurance schemes.
Colagiovanni allegedly used his foundation to make it appear as if St. Francis' funding came from Vatican sources, and assured others that St. Francis was legitimate.
"(Colagiovanni) used his position as a member of the Curia to convince state government officials and insurance companies in the United States that St. Francis was connected with the Vatican through Monitor Ecclesiasticus, and that St. Francis was a Vatican-funded initiative," the lawsuit contends.
In return, Frankel agreed to transfer $5 million to a Monitor Ecclesiasticus account that Colagiovanni controlled, according to the lawsuit.
Colagiovanni also is alleged to have escorted executives from an insurance company on a private Vatican tour to assure them that St. Francis had received Vatican money.
The lawsuit further alleges that senior Vatican officials approved the scheme and took no action to repudiate Colagiovanni's misrepresentations.
"High-ranking officials at the Vatican authorized or ratified the plan whereby Monitor Ecclesiasticus would be used as a conduit for the flow of Frankel's money to St. Francis to purchase U.S. insurance companies, which St. Francis claimed a `Vatican tie.' "
The insurance commissioners of the five states are already seeking more than $600 million in damages from Frankel in a lawsuit filed in 2000. The latest lawsuit was filed under federal racketeering statutes, which allow for actual damages to be tripled. A final judgment in this case could top $600 million.
Missouri officials became involved in the case when a company registered in the state, International Financial Services Life Insurance Co., was declared insolvent in May 1999.
Frankel acquired International Financial Services through a holding company in 1994. International Financial Services was registered in Missouri but had no offices there. It was licensed to provide modest burial plans in 40 states, but it had only one licensed agent in Missouri.
Officials have estimated that the company lost $57 million in the scam.
To reach Mark Morris, federal courts reporter, call (816) 234-4310 or send e-mail to mmorris@kcstar.com.
"The philosophers have only interpreted the world, in various ways. The point, however, is to change it." Karl Marx
"He would, wouldn't he?" Mandy Rice-Davies. When asked in court whether she knew that Lord Astor had denied having sex with her.
“I think it would be a good idea” Ghandi, when asked about Western Civilisation.
"He would, wouldn't he?" Mandy Rice-Davies. When asked in court whether she knew that Lord Astor had denied having sex with her.
“I think it would be a good idea” Ghandi, when asked about Western Civilisation.