Missouri’s most expensive fraud: Martin Sigillito
ST. LOUIS – Martin T. Sigillito was an Anglican bishop and a lawyer. He was also imprisoned for 40 years for his Ponzi scheme. Sigillito and J. Scott Brown, a Kansas attorney, stole $52 million from their clients.
Sigillito worked as an attorney in St. Louis in the late 1990s. He and Brown founded the British Lending Program, or BLP.
The BLP was formed as an investment program to prepare loans for an English law practice known as Mark Gilbert Morse, or MGM. MGM specialized on “black lung” lawsuits filed on behalf of English coal miners.
The BLP began offering loans for investments in real estate developments in England in approximately 2000 or 2001.
Prior to the year 2000, Sigillito was not wealthy, and filed for bankruptcy after a divorce. His legal clients were few and far between . Instead, the BLP was his primary emphasis from 2000 until 2010.
In order to gain money, Sigillito’s BLP would “loan” money to a real estate developer in the United Kingdom for short periods of time, mostly one year, at high rates of return, usually between 10 and 48 percent.
According to Sigillito, this estate developer had a knack for spotting undervalued properties he could flip for profit, had options on land that would become valuable when re-zoned, and had inside connections with British authorities. It sounded like a win-win for investors.
In order to get investors, Sigillito exploited his personal ties to people and particular groups he was affiliated with. These groups consisted of his church, social clubs, professional acquaintances, family, and neighbors. This is known as affinity fraud.
Sigillito also held himself up as an expert in international law and finance, and claimed he was a lecturer at Oxford University in England. He only took a simple summer legal program at Oxford.
While gaining all this money, Sigillito’s ego grew, and he became very confident in his Ponzi scheme.
He joined many private clubs in the St. Louis area, which helped fund his extensive collection of antique books, maps, prints, coins, jewelry, antiquities, liqueurs, and rugs. Papers and rare coins, a $1,200 bottle of cognac, and a lamp dating from 34 B.C. were among the items in this collection.
Sigillito took his family on luxury first-class trips around the world. He bought a country home in Marthasville, Missouri, hired a chauffeur, and sent his children to private school. He leased Volvo vehicles, and purchased expensive alcohol. In addition, he invested in a condominium complex on Missouri’s Lake of the Ozarks.Trending: Elliott Davis is alive and well, despite fake news
Brown, a lawyer, worked as an attorney in England for numerous years prior to the year 2000.
Brown also participated in the UMKC program while at Oxford. Brown was paid a lot of money by the BLP, but from 2000 to 2010, he didn’t really practice law.
Remember that British developer that Sigillito said was amazing? He was a part of the criminal conspiracy. Derek Smith is a real estate investor in the United Kingdom.
There were one-year unsecured loans with interest rates ranging from 15% to 48% under Smith’s name. He knew that Sigillito was telling his investors that Smith was a multimillion dollar real estate investor. He was in on the conspiracy the whole time.
Smith was not the sole borrower when the BLP began, but as additional borrowers failed to make payments, Sigillito and Brown assumed their debt and transferred it to Smith. Smith was the sole borrower left by 2003.
Beginning in 2004, Sigillito ran the BLP from his solo law firm in St. Louis. Smith owed about $70 million to investors as a result of BLP loans by 2010.4 finalists named for next St. Louis Police Chief
Nonetheless, Smith received very little of the loan proceeds. Instead, Sigillito and Brown utilized the majority of the money that was invested to pay the multiple debts owed to their investors.
Brown and Sigillito also kept a considerable share of the money from the lenders as loan costs, which might amount to up to 32% of the loan.
Smith barely got paid in apart of this scheme. In truth, Smith was bankrupt during the most of the BLP’s existence. Sigillito was aware of Smith’s financial situation.Close
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Sigillito, Brown, and Smith explained the false asset-to-debt ratios in each of the loan agreements signed by the various lenders.
Smith then wanted to exit the scheme. Sigillito, edited the loan agreement between Smith and him to reflect a debt-free Smith.
Sigillito then got Phil Rosemann, the BLP’s largest lender, to make a large loan to the BLP. Rosemann, on the other hand, wanted the debt paid off as soon as possible because the BLP had not paid him on schedule.
Sigillito worked tirelessly to sell the BLP in order to meet Rosemann’s demands. He lied about the extent of Smith’s obligations and the safety of the BLP, among other things.
Sigillito further indicated that as part of his due diligence for the lenders, he reviewed Smith’s financial accounts on a monthly basis, significantly distorting Smith’s alleged worth.
When Rosemann sued Smith for the money, the BLP began to fall apart.
Smith claimed he never got any of Rosemann’s funds.
Rosemann then sought clarification from Sigillito. Sigillito’s secretary, Elizabeth Stajduhar, informed the FBI about the BLP during this time. Stajduhar admitted to stealing more than $300,000 from Sigillito and more than $80,000 from the BLP between 2004 and 2010.
Following that, the FBI launched a criminal investigation, which resulted in Sigillito’s arrest and indictment.
In total, the BLP claimed roughly 150 victims. The BLP received at least $52 million in investor capital, according to public records.
A total of $28 million was utilized to settle previous loans. Sigillito made the highest money of any BLP member, earning almost $6.2 million.
Everything comes crumbling down
Missouri’s greatest Ponzi scam comes to a conclusion on April 28, 2011, with the mastermind found guilty and federally indicted.
Martin T. Sigillito, from Webster Groves, was found guilty of taking part in a plan to steal $52 million. He was instantly arrested by federal agents.
In September 2011, James Scott Brown , of Leawood, pleaded guilty to conspiracy to commit wire and mail fraud.
Derek J. Smith, 68, of Oxfordshire, England, pled guilty to his part in the conspiracy and is awaiting sentencing.
On March 19, 2012, the district court began a four-week jury trial.
After accepting plea deals, Stajduhar, Smith, and Brown all testified for the government. According to Brown and Smith, the BLP was a Ponzi scheme.
Brown claimed that the BLP only performed things for money, that Sigillito suspected the BLP was dead as early as 2003.
Smith claimed that the loan terms he agreed to were deceptive and contained misrepresentations.Copyright 2022 Nexstar Media Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.