On the Lam with Marty

By Karl Taro Greenfeld

Fugitive Martin Frankel, 44, a.k.a. Michael King, a.k.a. David Rosse, a.k.a. Eric Stevens, the financier who is accused of embezzling more than $200 million from a slew of insurance companies, and his traveling companion, Cindy Allison, 35, a.k.a. Susan Kelley, lounged in their Hotel Prem suite. They were watching the movie Patch Adams. For the fifth time.

It was just another Saturday night on the lam for Frankel and Allison, who for nearly two months had been shacked up here on the banks of Lake Alster in Hamburg, Germany. They had just pushed aside the remains of room-service dinners, the halibut lingering on trays in the suite's living room. On the floor next to Frankel's bed was a black suitcase that contained nearly $2 million in diamonds and about $250,000 in U.S. currency. The case never left his side.

"Then there was this noise, a little jiggle at the door," Allison told TIME in an exclusive interview, "and Marty turned to me and said, 'Do you think they're coming to get me?' and I said, 'No, don't be ridiculous.'"

She was wrong. Two German detectives burst into the room with guns drawn. From behind the protection of a bullet-proof Plexiglas shield, they announced in halting English that they were seeking two Americans. For some reason, they began to aggressively question Allison instead of Frankel, accusing her of using a false passport. Then Frankel looked up at a tall, blond detective and said, "I'm the one you're looking for."

Throughout the summer and into the fall, law-enforcement authorities in more than 115 countries had been looking for Frankel. The 6-ft., 135-lb., mousy-haired, bespectacled, bumbling, barred-for-life stockbroker had been transformed by the tabloid press into a sort of postmodern James Bond villain--one part Goldfinger, one part Woody Allen. He had eluded authorities for four months while traveling with a retinue of women, as rumors spread of his living large while lying low. Law-enforcement officials at first suspected that he was in Israel, then Brazil, and finally admitted they had no idea where he was.

Yet according to Allison, Frankel lived quite openly throughout much of his winding journey. He had gone from his Greenwich, Conn., mansion, where police found smoldering file cabinets and incriminating documents (item No. 1 on his to-do list: launder money), to a White Plains, N.Y., airfield, where a private jet flew him and two women, Mona Kim and Jackie Ju, to Rome, along with 25 suitcases and that stash of diamonds. Then he jaunted through Italy and Germany in chauffeured limousines, steadfastly maintaining to whoever would listen that his case was a misunderstanding that would blow over.

"I thought it was tax evasion or something like that," says Allison, back in the New York City area. "I didn't know what he had done. I used to ask him how much was missing, and he would say he didn't know."

How Allison, a stout redhead from Gibson City, Ill. (pop. 3,600), came to be involved with Frankel is revealing of his bizarre proclivities. She had answered his tele-personal ad and flown from Mission Viejo, Calif., to meet Frankel in Greenwich. What she found when she walked into the $3 million mansion was a halfway house of sorts, a community of women gathered from personal ads and Internet chat rooms, all in the employ of this monied recluse who spent his days hunched over trading terminals in the mansion's digitally locked bedroom-cum-offices.

"Some of the girls were his girlfriends, some of them he had sex with, and some were his ex-girlfriends. But a lot were just friends, like me," says Allison. "It was a fun life, but the women fought all the time. I used to tell him all these people were with him for the money. But then, maybe that's why I was there." Whenever Allison needed money, she filled out a requisition form, usually for about $4,000. "You always got what you asked for," she recalls.

Allison flew off to join Frankel in Rome on June 18. She felt sorry for him, she claims. He had sounded desperate when he called her from his Rome hideout, terrified of being alone, eager to engage in idle chat and already growing nostalgic for the life he had left behind. He had grown wistful, coming to realize that there was no returning to his Greenwich mansion and the financial Xanadu he had created.

Frankel's traveling companions eventually began to fall away, disillusioned with life on the lam, leaving Allison and him at the sparsely furnished Via Asmara apartments. "Marty used to ask me where we should go," Allison says. "He began to realize how small the world really is when everyone is looking for you."

During all this time, Frankel was losing a race to access his ill-gotten fortune before the law could seize his assets. He set up checking accounts in Rome under Allison's name, hoping to transfer funds from another of his Italian accounts. But that $500,000 stash was frozen by the Italian government. A Justice Department warrant mentioned his loot, and that made selling the diamonds too risky.

"He began to get really quiet, kind of introverted," Allison says. "And he would keep asking, 'Do you think they're going to catch me?'" Finally, after an evening meeting with an Italian business partner who Allison says had been aiding him, Frankel came back and announced they were leaving Rome.

At dawn the next morning, June 29, their luggage was loaded into a blue Mercedes, and they headed north, driving 14 hrs. through Tuscany, Milan and the Austrian Alps to Munich. Frankel had hoped an associate there would help him get at his money. After two days, though, Frankel began to sense a trap, and at midnight they checked out of the Astron Hotel.

"We asked the chauffeur, 'Should we go to Amsterdam?'" Allison says. He told them Amsterdam was dangerous. "We told him to drive north. Marty was real quiet most of the way." As the speeding Mercedes passed through the Bavarian night, Frankel asked Cindy if she still believed in God.

Cindy, raised a Roman Catholic, told him she did. Frankel shook his head. "How can you believe?" asked the man who had once established a phony Catholic charitable organization, the St. Francis of Assisi Foundation, in the hope of legitimizing his fraudulent operations.

The pair ended up in Hamburg almost by accident. Frankel planned to stay just a few days until he could concoct a new plan. They dined at La Mer, the hotel's seafood restaurant, and occasionally went out for the evening to Hamburg's red-light district. Allison set out on daily fact-finding missions to discover what had been written about Frankel's case.

"He didn't know where to go, what to do," says Allison. If as a young broker he had been too nervous to even make trades on behalf of his clients, as a fugitive he was proving incapable of even making a decision about where to run.

Those days at the Hamburg hotel, those nights watching television with Frankel hunched over an astrological chart or reading the Mirror or the Sun--he loved the British tabloids--began to blur, Allison says. They slept a lot and speculated about when Frankel would be caught. He was not apologetic. He had only wanted to have some fun, he told Allison, to live the American Dream. And up until that final night, somehow, he never imagined the American Dream would end in a German prison.