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Frankel associate pleads guilty to conspiracy, fraud charges

John Hackney, who authorities allege helped rogue financier Martin Frankel bilk millions from a number of insurance companies, has pleaded guilty to charges of conspiracy and mail fraud.

Hackney allegedly transferred the companies' cash reserves to Frankel, who then used the money for his own use.

Hackney entered his guilty plea in Hinds County District Court in Mississippi on Oct. 6. The charges stem from Hackney's alleged involvement with Frankel, who allegedly stole $200 million from three Mississippi insurance companies he acquired: Family Guaranty Life Insurance Co., First National Life Insurance Co. of America, and Franklin Protective Life Insurance Co. Hackney has pleaded guilty to federal charges of conspiracy and money laundering in Connecticut and Tennessee.

Frankel appointed Hackney president of the three insurers. Hackney allegedly transferred the companies' cash reserves to Frankel, who then used the money for his own use. Hackney also allegedly submitted false financial statements and regulatory filings to the Mississippi Insurance Department. The statements and filings allegedly concealed Frankel's ownership of the three companies.

"This plea is only the first prosecuting those individuals who assisted Martin Frankel in executing this elaborate fraud in Mississippi," Attorney General Michael Moore says.

Frankel is incarcerated in Hamburg, Germany, awaiting extradition to the United States. Law enforcement officials arrested Frankel in a German hotel on Sept. 4, 1999. He already faces federal charges of wire fraud, money laundering, securities fraud, racketeering, and conspiracy to commit racketeering, as well as lawsuits from the Securities and Exchange Commission and state insurance departments in Arkansas, Mississippi, Missouri, Oklahoma, and Tennessee.

Hackney faces a possible prison term of 10 years and a fine of $15,000.

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