A Missouri clergyman who orchestrated a massive Ponzi scheme that duped investors out of over $50 million is set to receive a 40-year prison term at his sentencing later this month. According to a sentencing memo authored by United States District Judge Linda Reade, Kansas priest and attorney Martin Sigillito will receive the term when he is sentenced December 28th for a scheme that ensnared over 100 victims. Sigillito had faced as many as 325 years in prison after a federal jury found him guilty earlier this spring of all twenty criminal charges he faced. When Sigillito was indicated in May 2011, authorities claimed the scheme was the largest in the history of the Eastern District of Missouri.
Sigillito held himself out as an expert in finance and international law, and claimed he was an adjunct lecturer at England's Oxford University. In addition to running his own law office, Martin T. Sigillito and Associates, he was also an ordained priest and bishop in a church known as the American Anglican Convention.
According to the indictment, Sigillito, along with co-conspirator James Scott Brown, a Kansas attorney, began marketing the British Lending Program ("BLP") to investors in 2000. BLP was advertised as a prominent real estate development venture, and investors were told that another co-conspirator, Derek Smith, was a highly successful real estate investor who had a proven track record of identifying undervalued properties that could be quickly purchased, refurbished, and resold for a quick profit. Investors were promised that, in return for loaning large amounts of money to BLP, they could expect to receive an above-average rate of interest in return. Over the life of the scheme, which spanned nearly a decade, investors "loaned" BLP over $50 million.
Yet, the majority of investor funds were used not for legitimate real estate projects, but instead to sustain an elaborate Ponzi scheme. Besides misapropriating funds to sustain the trio's lavish lifestyles, approximately $27 million was used to make Ponzi-style payments to investors purporting to be interest and principal payments. When Sigillito's secretary became suspicious and went to authorities in 2010, BLP was nearly insolvent. Sigillito himself stole more than $6 million from investors, using the funds to live a high life that included the purchase of antique books, papers, rare coins, a $1,200 bottle of cognac, and a lamp from 34 B.C.
Smith and Brown cooperated with authorities and pled guilty to charges of conspiracy to commit mail fraud and conspiracy to commit wire fraud in September 2011. Brown received a three-year term earlier this summer.
A copy of the Indictment is here.