On Decemer 28, 2012, a former St. Louis attorney and bishop, Martin Sigillito was sentenced to 40 years in federal prison after a Federal Jury convicted him in April 2012 of his role in the British Lending Program Ponzi scheme. While the scheme was described as a Ponzi scheme, Sigillito’s actual federal charges included criminal conspiracy, criminal wire fraud, criminal mail fraud, and money laundering.
The British Lending Program (BLP) was a Ponzi scheme in which private individual lenders were convinced their monies were being transferred to England to fund profitable real estate transactions with high interest returns. However, instead of lender money being sent overseas for real estate development, Sigillito placed the lender’s money in his attorney trust account in the United States. This money was rarely, if ever, used for the purpose for which is was intended, but rather used by Sigillito and his Co-Defendant, James Scott Brown for their personal expenses.
When lender’s interest payments became due, or if they asked to withdraw their money from the British Lending Program, the money to repay them did not come from profitable real estate business as represented by the Defendatns, but instead came from money lent by others, in classic Ponzi scheme manner.
It is reported that Sigillito and Smith each profited in excess of $6.1 million on this Ponzi scheme while over $52 million in loan funds were obtained by the Bristish Loan Program. Only $27 million was used to repay interest and principal to those individual lenders that were defrauded. Sigillito was also ordered to pay $30 Million in restitution as the actual out of pocket loss to the victim’s although such a payment is unlikely given his lengthy federal prison sentence. The British Loan Program is reported to have had no money left as of 2010 when the scheme came to a close.
In contrast to Sigillito’s 40 year sentence, Brown, Sigillito’s Co-defendant was sentenced to three years in federal prison after pleading guilty and agreeing to cooperate with authorities in the fall of 2012.