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INSIDER OR DUPE? JURY TO DECIDE MONA KIM’S ROLE

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INSIDER OR DUPE? JURY TO DECIDE MONA KIM’S ROLE

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In the course of stealing more than $200 million from insurance company reserve funds, Martin Frankel conned lawyers, insurance company executives, accountants, auditors and regulators.

Did he also con Mona Kim, who rose through the ranks at his Greenwich compound from “nanny” to office manager and was with Frankel when he fled the country?

A federal jury in New Haven today will begin debating whether Kim, 37, was a player or a mere pawn in Frankel’s highly sophisticated scheme. Assistant U.S. Attorney Mark Califano urged jurors to make Kim accept the responsibility she sought so aggressively within Frankel’s operation.

“She’s an intelligent woman and you must give her credit for that,” Califano argued. “Make her take responsibility today for everything she took responsibility for when she was working for Mr. Frankel. And that means you have to find her guilty.”

Kim is charged with seven felony counts centering on wire fraud, money laundering, racketeering and conspiracy. She is the only one of a dozen defendants to opt for a trial rather than plead guilty. She testified that she believed Frankel was a brilliant trader and aspired to learn the secrets of success he boasted about. She said she didn’t learn until after they left the country May 4, 1999, that the funds Frankel had manipulated so deftly were stolen.

“She clearly and unequivocally stated her lack of knowledge, her lack of involvement” in the fraud scheme, defense attorney Peter Kelly argued. “My fear is she’s going to be swamped in these 500 boxes of documents,” he added, pointing to the government’s boxes of evidence tucked under tables and benches. Few documents bear her name, but prosecutors brush that off as irrelevant, saying she joined a conspiracy in progress.

Kelly disparaged the testimony of prosecution witnesses Alicia Walters and Karen Timmins, former Frankel associates who testified Kim was in his “inner circle.” Walters was granted immunity from prosecution in exchange for her cooperation and Timmins, Frankel’s former office manager who handled all of his wire transfers of funds, faces a maximum of three years.

“People like Walters and Timmins are what I would call creatures of the government,” Kelly told the jury. “The government has the very real power to control them.”

Kelly said Kim viewed Frankel as a man of obvious wealth and success.

“There was nothing to suggest this was an illegal operation or an insurance scam,” Kelly argued. “If the lawyers and insurance hotshots … didn’t know, how is Ms. Kim supposed to know?”

Prosecutors had ready answers, chronologies, memos Kim had sent Frankel. One memo sent in early April 1999, as she was researching the purchase of $20 million in gold coins, stated in capital letters, “NO PAPER TRAIL.” Another memo reminded him of which alias he was to use.

On April 27, 1999, with Mississippi insurance regulators homing in on Frankel’s operation, Kim followed Frankel’s instructions and confirmed for auditors the presence of almost $759 million in a phony investment firm Frankel had created. That confirmation, they said, was vital to one final but enormous theft of $44.7 million from Settlers Life Insurance Co. of Tennessee, less than a month before Frankel fled. Prosecutors more than once reminded jurors of Kim’s professional background as a bookkeeper.

Califano and Assistant U.S. Attorney Jeffrey A. Meyer highlighted the various letterheads of Frankel shell companies that contained addresses that were nothing more than post office boxes, and phone numbers that were patched through to Frankel’s compound at 889 Lake Ave. in Greenwich. Kim, they said, opened various bank accounts to facilitate the money laundering.

“There’s no claim here that Mona Kim is the mastermind of this scheme to defraud,” Meyer said. “But Mona Kim made a decision to perpetuate Martin Frankel’s fraud in the early part of 1999.”

On one bank account, Kim listed her occupation as a student at the University of New York, which she was not. On cross-examination, Kim testified, “According to Mr. Frankel, it was OK to lie, but just not to him.”

Prosecutors had a field day Wednesday incorporating that testimony, that philosophy, into their final arguments.

“It’s not OK to lie to auditors, it’s not OK to lie to insurance companies and it’s not OK to lie to financial institutions [even] when you’re being told to do it,” Califano told jurors. “It’s not OK to smuggle diamonds into Italy, and it’s not OK to hold money under your name when you know all that money is stolen.”

While in Europe, even as press reports emerged about the staggering scope of Frankel’s fraud and the worldwide manhunt underway, Kim agreed to open a bank account for Frankel in her name. When she finally told him she wanted to return to the United States, he gave her $15,000 and she, in turn, promised him she would give him time to relocate. She spent several days in Paris before returning to Connecticut.

Kelly argued that Kim had become Frankel’s de facto office manager after a string of women quit or were fired, but the job did not entail helping Frankel in his insurance fraud.

“He didn’t need any help,” Kelly argued. “It’s a testament to his ability and twisted genius that he could keep these lawyers and regulators and businessmen conned for eight years. But you’re being asked to find as fact that she had full knowledge of his insurance scam.

“If Mona Kim was such a financial genius that she knew within a few months everything about Martin Frankel’s scheme, what did she get out if it?” Kelly asked the jury. “A [plane] ticket, a trial and $15,000.”

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