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“The Pretender” by Ellen Joan Pollock (Wall Street Journal Books, 276 pages, $25) About three years ago, a complex insurance fraud began to unravel in the wake of what at first seemed to be a third-rate home fire and a subsequent police investigation in Greenwich, Conn. The scam left the shareholders of dozens of small insurance companies holding the bag for upward of $200 million. This was no Enron, though. It didn’t come close to shaking the nation’s psyche or its economy; it featured a motley, ever-shifting cast of characters but only one true scoundrel; it didn’t pose any complicated ethical or political dilemmas; and the dollar amounts involved, although far from trivial, would barely have dented Enron’s balance sheet. This was, of course, the truly outlandish Martin Frankel affair. As the scandal was unfolding in 1999 in The Wall Street Journal and other papers, it seemed to the casual reader that Frankel, once a humdrum Toledo stockbroker, had actually been a master scam artist with untold abilities to fool regulators, business associates, investors and everyone else. Ellen Joan Pollock, who had been a member of the Journal‘s coverage team, spent two years writing this book, which shows beyond dispute that Frankel, who is now awaiting trial for a series of federal crimes, was much less skillful and much more bizarre than that (but equally culpable). Far from a brilliant financial manipulator, Frankel had a psychological “trading block” that prevented him from buying and selling stocks and bonds. Although physically repulsive, he attracted dozens of women, most of them quite troubled, and developed a taste for strange sexual practices, which Pollock describes at length. He was neurotic, cowardly and inordinately suspicious of other people. His scams succeeded primarily because no one was bothering to look. They were not terribly sophisticated. He essentially bought small, state-regulated insurance companies in Southern states, and proceeded to loot them, while preparing false balance sheets and investment statements. The money went to fund his extravagant and quite abhorrent lifestyle. Frankel was extremely good at one thing, however. He was able to draw wealthy, influential people into his circles, and through them to pull in other top-drawer individuals. It was all illusion on top of illusion. One of those deceived was Robert Strauss, the patriarch of Washington, D.C.’s Akin, Gump, Strauss, Hauer & Feld, who entered Frankel’s life through a mysterious socialite named Tom Corbally, who was a friend of Strauss’. Corbally, Pollock says, “knew everyone, everywhere. Barbara Walters, Rita Hayworth, Lee Iacocca, Henry Kissinger, Larry Tisch, Roy Cohn, Heidi Fleiss … he’d hobnobbed with them all.” Strauss brought Frankel in as a client, thus according the scoundrel even more cachet; Akin Gump proved in the long run to be yet another victim. And in view of the Enron events of 2001, it’s interesting that although Akin Gump lawyers kept asking searching questions to Frankel’s people, they always ended up just barely satisfied with the convoluted explanations that their client gave. The scam fell apart as a result of a combination of astute state insurance regulation, good police work, and dumb luck. (Through a spokeswoman, Akin Gump Chairman R. Bruce McLean declines comment on the book, citing the fact that the Frankel matter is in litigation.) Pollock, who has worked at the Journal for 12 years, did prodigious research for this book, and it shows. She obviously enjoyed writing about the juicier aspects of Frankel’s lifestyle — the kinky personal advertisements that Frankel placed, the disheveled Greenwich mansion, the bondage paraphernalia, the obsession with astrology. It would all be funny if it weren’t so sad. Pollock is also quite effective in her final chapters, when she painstakingly tells the story of the slow unraveling of the Frankel empire, keeping the reader in suspense even though we all know how it will end. The book does contain one narrative flaw. In Chapter 5, Frankel’s minions are buying one insurance company after another in the mid-1990s. An employee says money is flowing rapidly into Frankel’s Tennessee holding company: “We don’t know [where the money is coming from]. We just say what we need, and we get it.” Then in Chapter 6, the scene switches to the newly rented Greenwich mansion. Marty Frankel is “making up statements” for the insurance companies — but almost immediately, we find him stationed in front of his computer, not trading stocks but, pants unzipped, “studying the array of sexuality available outside the sphere of his parents’ world in Toledo.” On to sadomasochism and beyond. Pollock refers to money floating around in Swiss bank accounts and in traveler’s checks, but just how was the scam pulled off? What she never does, until the end of the book, is to tell us just how the insurance companies were looted. What did the shareholders know? What about the policyholders; were they paid? The contrast between the seemingly mundane Tennessee insurance holding company and the suburban Connecticut nest of women of dubious reputation is the key to the story, but Pollock shortchanges the Tennessee aspects. Why not follow just one acquisition and explain how that company’s money was taken and where it went? Among other things, that would explain who Frankel’s accomplices were and what they did to further the scams. Frankel was, after all, not the only one to be charged with a crime when the house of cards fell in. Still, “The Pretender” is great fun to read. It reminds us that the smooth reassurances of Enron executives aren’t the only way in which investors can lose their shirts.

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