Given the federal government’s increasing propensity to regulate business through criminalizing questionable business transactions, it’s easy to overlook the instances where the criminal justice system actually punishes a real bonafide business crook.
Martin Frankel was a small-time New York money manager in the early 1990’s who was paralyzed with fear from trading stocks. Accordingly, rather than trade equities, Frankel arranged for the acquisition of a group of financially-troubled insurance companies throughout the 1990’s. He then used the assets of those insurance companies to pull off a several hundred million dollar scam, which is one of the largest insurance frauds in American history.
With investigators closing in on him in May, 1999, Frankel bought millions of dollars worth of diamonds, wired money to accounts all over the world, torched any remaining paper trail, and fled the country for Germany under a blaze of publicity. He was apprehended in Germany several months later, spent a year and a half in a German prison, and then was extradicted to the United States to face criminal charges here.
Although largely forgotten in the wake of Enron and other large business meltdowns, Frankel turned out to be a fascinating character. He was a gawky misfit with an obsessive terror of germs who nevertheless was able to induce attractive young women to fight over him. Although intensely reclusive, Frankel was able to build an intricate Ponzi scheme that was in no small part attributable to his talent for luring prominent people — such as Texas Democratic powerbroker Robert Strauss — into his scam. He even created a phony Catholic charity that went into business with a group of priests with close Vatican ties.
The Wall Street Journal’s Ellen Joan Pollock was a lead writer on the reporting team that covered the FBI’s four-month international manhunt for Frankel, and she eventually wrote a good book about the affair called The Pretender. With the right treatment (are you listening Professor Ribstein?), Frankel’s story of risky business deals, duplicitous businessmen, con artists, jewelry traders, women looking for love, women looking for money, revengeful husbands, and slick private detectives is a potential blockbuster movie just waiting for the right screenplay.
At any rate, as this NY Times article reports, Frankel’s affair came to a typically bizarre close yesterday, as he was sentenced to almost 17 years in the slammer:

The most bizarre 45 minutes took place when the judge allowed Mr. Frankel to address the court. He used the opportunity to settle old scores, quote the Bible, crack a joke and plead for leniency. He said most of his misdeeds were caused by his love for a co-conspirator, Sonia Howe, and his desire to earn enough money to protect her two children from harm. The judge was a bit incredulous.
“So, you stole $209 million in order to take care of the children?” she said.
“No,” he said. “Can I explain it to you?”
“I’m begging you to explain it to me,” the judge said.

Meanwhile, as the admitted perpetrator of one of the largest insurance scams in American history was sentenced to 17 years in prison, a mid-level accountant who did what his bosses told him to do in regard to a merely questionable business transaction continues to serve a 24 year prison sentence.
Folks, you cannot ask for a starker example of the injustice that results from government criminalizing dubious business transactions to assuage public animus toward business failures such as Enron. If government cannot tell the difference between Martin Frankel and Jamie Olis, then it is unlikely that it can tell the difference between Martin Frankel and you or me.

You gotta love Southwest Airlines, Inc.
While most of the legacy airlines are trying to figure out either how to avoid bankruptcy or find financing to exit bankruptcy, Dallas-based Southwest just continues to execute its methodical business plan of expanding its low-cost operations in markets that respond to it.
Yesterday, Southwest bid more than $100 million for some key assets of bankrupt airline ATA Holdings Corp., including six of ATA’s 14 gates at Chicago’s Midway Airport.
The addition of the six ATA gates would increase Southwest’s capacity at Midway by nearly a third. The airline operates about 150 daily flights from Midway and has already announced it would add 25 more by the middle of next year even without the ATA asset acquisition. The company has more than 2,500 employees in Chicago, which is its fourth largest operation.
Southwest is battling for ATA’s assets with another low-cost airline, AirTran, which has submitted a $90 million bid. The Midway gates would give either carrier an increased presence in Chicago, which is the key high-traffic city in the central United States. The fight over Indianapolis-based ATA’s holdings began last October when it filed its Chapter 11 case, which is the first large low-cost carrier to file bankruptcy during this latest period of carnage in the always tumultuous American airline industry.