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The insurance commissioners of five states are suing the Vatican, alleging the church was involved in a $200 million-plus insurance fraud scheme run by now-jailed financier Martin Frankel. The federal lawsuit, filed Thursday by the commissioners of Mississippi, Tennessee, Missouri, Oklahoma and Arkansas, accuses the Vatican and Monsignor Emilio Colagiovanni of racketeering and fraud. “We’re not trying to embarrass the Vatican. We’re just trying to do what we have to do under the statutes,” said Lee Harrell, Mississippi’s deputy insurance commissioner. “We wouldn’t be suing them if we didn’t think they did some things wrong and that they owed us money.” The Vatican said it had no immediate comment on the lawsuit. The lawsuit says that in 1998 Frankel, with the help of Colagiovanni, tried to use the church as a front to purchase insurance companies. It says Frankel was to give $55 million to the Vatican as a charitable foundation. The Vatican would keep $5 million and Frankel would retain control over the remaining $50 million, using the Vatican’s name to further fraudulent business prospects. The suit says the Vatican was associated with the fraud through the actions of Colagiovanni in his role as a senior member of the Vatican government, and that other senior Vatican officials knew of the schemes but did not act to stop them. The states are seeking the $200 million-plus as the amount U.S. insurance companies lost. The Vatican, Harrel said, never benefited from the $200 million, but under the Racketeer Influenced and Corrupt Organizations (RICO) statute, a party involved in the conspiracy is responsible for the entire amount stolen. While Frankel is not a defendant in Thursday’s filing, the suit says that from 1990-1999 Frankel devised numerous schemes to commit fraud, including setting up false insurance companies. Colagiovanni, a senior member of the Vatican government at the time, helped propose the scheme to senior Vatican officials, the lawsuit says. Because the Vatican assisted Frankel in the attempted purchase of U.S. insurance companies, the suit says, the Holy See carried on commercial activities in the United States, activities that were not sovereign and not religious. The suit was filed in Mississippi because some 70 percent of the more than $200 million allegedly stolen was looted from Mississippi companies, Harrell said. He said most of the sham offices were based in Franklin, Tenn. The states accused Frankel of using pseudonyms and partners to buy small insurance companies in their states, which have reputations for lax insurance regulations. Then, regulators say, Frankel siphoned money from the companies through his unlicensed brokerage run out of his Greenwich, Conn., home. Frankel was arrested in Germany in 1999 and is jailed in Rhode Island awaiting trial in U.S. District Court in New Haven, Conn., on charges of racketeering, fraud and conspiracy. Colagiovanni was arrested in Ohio in August 2001 on charges of wire fraud and conspiracy to launder money in connection with a multimillion-dollar insurance scam. He is accused of assisting Frankel using the St. Francis of Assisi Foundation to acquire insurance companies while concealing Frankel’s involvement. Copyright 2002 Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.

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