Missouri’s most expensive scam: Martin Sigillito

ST. LOUIS – Martin T. Sigillito was an Anglican bishop and lawyer. He was also jailed for 40 years for his Ponzi scheme. Sigillito and J. Scott Brown, a Kansas attorney, $52 million stolen from their customers.

Sigillito practiced law in St. Louis in the late 1990s. He and Brown founded the British Lending Program or BLP.

The BLP was set up as an investment scheme to prepare loans for an English law firm called Mark Gilbert Morse or MGM. MGM specialized in “black lung” lawsuits brought on behalf of English miners.

The BLP began offering loans for investment in property developments in England around 2000 or 2001.

Prior to 2000, Sigillito was not wealthy and filed for bankruptcy after a divorce. His legal customers were few and far between. Instead, the BLP was his main focus from 2000 to 2010.

To make money, Sigillito’s BLP ‘lent’ money to a property developer in the UK for short periods, usually a year, at high returns, typically between 10 and 48 per cent.

According to Sigillito, this property developer had a knack for spotting undervalued properties to exchange for a profit, had options on land that would become valuable if reclassified, and had internal connections with UK authorities. It sounded like a win-win situation for investors.

To attract investors, Sigillito used his personal connections to individuals and specific groups to which he belonged. These groups consisted of his church, clubs, professional acquaintances, his family and neighbors. This is known as affinity fraud.

Sigillito also claimed to be an expert in international law and finance, claiming he was a lecturer at Oxford University in England. He only attended a simple summer law program at Oxford.

While making 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, antiques, liquors, and carpets. Items in this collection included papers and rare coins, a $1,200 bottle of cognac, and a 34 BC lamp.

Sigillito took his family on luxurious first class trips around the world. He bought a country house in Marthasville, Missouri, hired a chauffeur and sent his children to private school. He leased Volvo cars and bought expensive alcohol. He also invested in a condominium complex on Lake of the Ozarks in Missouri.

Brown, a solicitor, practiced law in England for many years prior to 2000.

Brown also participated in the UMKC program while at Oxford. Brown was paid big bucks by the BLP, but he didn’t actually practice law from 2000 to 2010.

Remember that British developer Sigillito said was awesome? He was part of the criminal conspiracy. Derek Smith is a real estate investor in the United Kingdom.

There were one-year unsecured loans under Smith’s name with interest rates ranging from 15% to 48%. He knew Sigillito told his investors that Smith was a multi-million dollar real estate investor. He was privy to the conspiracy the whole time.

Smith wasn’t the only borrower when the BLP began, but when other borrowers defaulted, Sigillito and Brown took over their debt and transferred it to Smith. Smith was the only borrower left in 2003.

Beginning in 2004, Sigillito managed BLP from his solo practice in St. Louis. Smith owed investors about $70 million as a result of BLP loans through 2010.

Despite this, Smith received very little of the loan proceeds. Instead, Sigillito and Brown used most of the money invested to pay off the many debts they owed their investors.

Brown and Sigillito also kept a significant chunk of money from lenders as borrowing costs, which can account for as much as 32% of the loan.

Aside from this scheme, Smith was barely paid. In truth, Smith was bankrupt for most of the BLP’s existence. Sigillito was aware of Smith’s financial situation.

Sigillito, Brown and Smith explained the incorrect asset-to-debt ratios in each of the loan agreements signed by the various lenders.

Smith then wanted out of the program. Sigillito edited the loan agreement between Smith and himself to reflect a debt-free Smith.

Sigillito then got Phil Roseman, the BLP’s largest lender, to give the BLP a large loan. Rosemann, on the other hand, wanted the debt paid off as quickly as possible because the BLP had not paid him as planned.

Sigillito worked tirelessly to sell the BLP to meet Rosemann’s demands. Among other things, he lied about the extent of Smith’s obligations and the safety of the BLP.

Sigillito further stated that as part of his due diligence for the lenders, he reviewed Smith’s financial accounts on a monthly basis, which significantly distorted Smith’s alleged value.

When Rosemann sued Smith for the money, the BLP began to fall apart.

Smith claimed he never received any of Rosemann’s money.

Rosemann then asked Sigillito for clarification. Sigillito’s secretary, Elizabeth Stajduhar, briefed the FBI on 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.

The FBI then launched a criminal investigation, which resulted in Sigillito’s arrest and charges.

Overall, the BLP claimed around 150 victims. According to public records, the BLP received at least $52 million in investor capital.

A total of $28 million was used to pay off previous loans. Sigillito earned the most money of any BLP member, earning nearly $6.2 million.

Everything is crumbling

Missouri’s biggest Ponzi scam ends on April 28, 2011, when the mastermind was found guilty and federally charged.

Webster Groves’ Martin T. Sigillito was found guilty of participating in a plot to steal $52 million. He was immediately arrested by federal agents.


September 2011, James Scott Brownof Leawood, pleaded guilty to conspiracy to commit wire and mail fraud.

Derek J. Smith, 68, of Oxfordshire, England, has pleaded 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 pleas, 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 did things for money that Sigillito suspected the BLP was dead as early as 2003.

Smith claimed that the loan terms he agreed to were misleading and contained false information.

https://fox2now.com/news/missouri/missouris-most-expensive-fraud-martin-sigillito/ Missouri’s most expensive scam: Martin Sigillito

Sarah Y. Kim

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