KANSAS CITY, MO—Beth Phillips, United States Attorney for the Western District of Missouri, announced today that two attorneys, one residing in Webster Groves, Mo., and the other residing in Leawood, Kan., along with a real estate speculator in the United Kingdom, have been indicted by a federal grand jury for their roles in a fraud conspiracy that stole more than $52 million from their victims.
Martin T. Sigillito, 62, of Webster Groves; James Scott Brown, 66, of Leawood; and Derek J. Smith, 67, of Oxfordshire in the United Kingdom, were charged in a 22-count indictment returned under seal by a federal grand jury in St. Louis, Mo., on Thursday, April 28, 2011. That indictment was unsealed and made public today following Sigillito’s initial appearance in the U.S. District Court in St. Louis, Mo.
“The federal indictment alleges that conspirators stole more than $52 million through a Ponzi scheme that lasted nearly a decade,” Phillips said. “Combating financial fraud is a priority for the Department of Justice. We will aggressively prosecute those who illegally profit at the expense of their victims.”
“When it comes to Ponzi schemes, the amount of money stolen in this case is the largest in the history of the Eastern District of Missouri,” said Special Agent in Charge Dennis L. Baker of the FBI St. Louis Division. “No matter how elaborate the schemes, they all eventually collapse.”
“IRS Criminal Investigation is committed to investigating Ponzi schemes in an effort to protect the financial well being of the American public,” said C. Steve Howard, Acting Special Agent in Charge of IRS Criminal Investigation, St. Louis Field Office. “We will continue to work with our law enforcement partners to bring this investigation to a thorough and complete conclusion.”
Sigillito, Brown, and Smith are each charged with participating in a conspiracy to commit wire and mail fraud. The federal indictment alleges that, during a 10-year period from 2000 to 2010, investors in the United States loaned a total of $52.5 million to Smith through a Ponzi scheme that was known as the British Lending Program. Victims believed they were loaning money for legitimate real estate development projects, the indictment says, but in reality, most of their money was kept by Sigillito and Brown (or used to pay interest and principal to other lenders). According to the indictment, Sigillito gained nearly $8 million from the fraud scheme and used it to support an affluent lifestyle.
Tuesday, May 10, 2011
Martin T. Sigillito, James Scott Brown and Derek J. Smith, Indicted for $52 Million Ponzi Scheme
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