MARTIN FRANKEL ASSOCIATE PLEADS GUILTY IN TENNESSEE

John Hackney, a former associate of financier Martin Frankel, has pleaded guilty to fraud charges levelled by authorities in Tennessee for his participation in a scheme with Mr Frankel to defraud seven small US burial insurers and reinsurers out of more than $200m. Under a plea agreement, Mr Hackney faces up to 24 years in prison after admitting that he received more than $7.3m from Mr Frankel to help implement the fraud scheme. Mr Hackney reached the deal with state prosecutors a week after pleading guilty to federal securities fraud charges in Connecticut in connection with the affair. According to federal authorities, Mr Frankel hired Mr Hackney to serve as the trustee of Thunor Trust, the Tennessee-based company through which the seven insurers were purchased. The two men allegedly arranged for insurer assets to be transferred to a securities trading firm controlled by Mr Frankel under the pretence that the funds would be invested. Mr Frankel instead transferred the funds to overseas accounts and supported a lavish lifestyle. The insurers have been seized by regulators in five states and are in various stages of liquidation or rehabilitation. Mr Hackney is to be sentenced in the federal and state cases next year. Mr Frankel remains in a German prison where he is serving a three-year sentence for customs and passport violations.