Franklin National Bank

Franklin National Bank, based in Franklin Square in Long Island, New York was once the United States' 20th largest bank. On October 8, 1974, it collapsed in obscure circumstances, involving Michele Sindona, renowned Mafia-banker and member of the irregular freemasonic lodge, Propaganda Due. It was at the time the largest bank failure in the history of the country.

Banking innovations

Under the leadership of Arthur T. Roth, Franklin National Bank introduced many banking innovations, such as:

* Junior savings accounts (1947)
* The drive up teller window (1950)
* The bank credit card (1951)
* A no-smoking policy on banking floors (1958)
* Installed outdoor teller machines at branch banks (1968)
* Franklin Savings Bond which later developed into the Certificate of Deposit. (1969)

Collapse

In 1972, Michele Sindona, a banker with close ties to both the Mafia, the purportedly bogus Freemasonic lodge, P2, and the Nixon administration, purchased controlling interest in Long Island's Franklin National Bank, from Laurence Tisch, Chairman of Loews Corporation, which owned hotels in Italy. Later the U.S. Comptroller of the Currency declared Tisch an unqualified director for reasons of conflict of interest, paving the way for Sindona to take over Franklin. Sindona paid more than Tisch had paid for the stock. Tisch was later sued by the Federal Deposit Insurance Corporation (FDIC) for breach of fiduciary duty with respect to the sale of his shares to Sindona.

As a result of his acquisition of a controlling stake in Franklin, Sindona finally had a money laundering operation to aid his alleged ties to Vatican Bank and the Sicilian drug cartel. Sindona used the banks ability to transfer funds, produce letters of credit, and trade in foreign currencies to begin building a banking empire in the U.S. Sindona used his alleged influence in the Republican Party and the Nixon administration to ensure that his background did not inhibit has ability to become Vice Chairman and largest stockholder in the Bank. On 8 October 1974, the bank was declared insolvent due to mismanagement and fraud, involving losses in foreign currency speculation and poor loan policies [ [http://www.time.com/time/archive/preview/0,10987,921970,00.html Account Settled - TIME ] ] . Following their 1979 trial in Federal District Court in New York, Gleason, Paul Luftig, the bank's former president and chief administrative officer and J. Michael Carter, a former senior vice president, were convicted of falisfying financial records. In 1980, "mysterious Michele" was convicted in the United States and was extradited to Italy. [ [http://www.guardian.co.uk/print/0,3858,4813656-111093,00.html 'Who killed Calvi?'] - Guardian ] [ [http://www.clarin.com/diario/96/05/23/turr.html Clarín Digital ] ]

In March 1986, he died of cyanide poisoning while serving a life sentence. Some sources indicate he was murdered, while others indicate he committed suicide. Franklin's assets were later purchased by European American Bank, itself later acquired by Citigroup.

References

External links

* [http://www.newsday.com/community/guide/lihistory/ny-past1109,0,6557342.story?coll=ny-lihistory-navigation Breaking the Bank Roth Built] by George DeWan, Newsday Long Island History Site