1 00:00:00,000 --> 00:00:05,440 Episode of American Greed. In St. Louis, Missouri, Martin Sigilito is a jet 2 00:00:05,440 --> 00:00:06,880 -setting international lawyer. 3 00:00:07,520 --> 00:00:12,160 who lectures at Oxford, checks on his $50 million British real estate 4 00:00:12,320 --> 00:00:16,340 and attends to his heavenly affairs as a bishop in the Anglican Church. 5 00:00:16,740 --> 00:00:21,780 He always traveled first class, a lot of $10 ,000 expenses monthly on his charge 6 00:00:21,780 --> 00:00:22,780 cards. 7 00:00:22,900 --> 00:00:27,320 Stateside, he's a board member of the Racquet Club, St. Louis' most exclusive 8 00:00:27,320 --> 00:00:30,000 clique, and a man with an impeccable reputation. 9 00:00:30,740 --> 00:00:34,200 He seemed very knowledgeable, charismatic, professional. 10 00:00:35,040 --> 00:00:38,560 An attorney, a trusted advisor, a friend. 11 00:00:38,900 --> 00:00:44,020 That is, until his own secretary unmasks him as a wolf in priest's clothing. 12 00:00:44,480 --> 00:00:45,439 I was shocked. 13 00:00:45,440 --> 00:00:49,380 I couldn't believe it. It was devastating. I mean, all these people 14 00:00:49,380 --> 00:00:50,640 lose their life savings. 15 00:01:05,710 --> 00:01:11,610 In May 2010, British attorney Irvinder Bakshi is on a mission to find $20 16 00:01:11,610 --> 00:01:15,630 million. She heads out of London on the M4 motorway. 17 00:01:16,030 --> 00:01:18,590 I had no idea what I was getting myself into. 18 00:01:19,610 --> 00:01:24,130 She's been hired by a U .S. client to find out why he isn't getting paid the 19 00:01:24,130 --> 00:01:27,930 millions he's owed by a British land developer named Derek Smith. 20 00:01:28,540 --> 00:01:32,200 And now she's concerned that she's headed into the lair of this potential 21 00:01:32,200 --> 00:01:33,660 criminal mastermind. 22 00:01:33,980 --> 00:01:40,820 I was going to interview a man who we suspected had taken a huge amount 23 00:01:40,820 --> 00:01:47,700 of money from my client and I could possibly personally 24 00:01:47,700 --> 00:01:48,760 be at risk. 25 00:01:50,510 --> 00:01:55,490 But once she sits down with him, Bakshi begins to realize that he knows less 26 00:01:55,490 --> 00:01:57,490 about where the money is than she does. 27 00:01:57,930 --> 00:02:00,350 He was absolutely calm. 28 00:02:00,630 --> 00:02:03,350 He didn't seem to have any information whatsoever. 29 00:02:04,730 --> 00:02:09,090 Smith tells Bakshi if she wants to find the money, the person she should be 30 00:02:09,090 --> 00:02:14,090 talking to is his American partner, who lives 4 ,000 miles away in St. Louis, 31 00:02:14,230 --> 00:02:15,230 Missouri. 32 00:02:17,790 --> 00:02:23,410 Every Sunday, Martin Sigilito dons his gilded robes and steps before his 33 00:02:23,410 --> 00:02:27,150 congregation as bishop of a St. Louis American Anglican Church. 34 00:02:28,490 --> 00:02:33,510 In the pews are Richard and his wife Melba, a couple who do not want their 35 00:02:33,510 --> 00:02:38,410 name used, and who have known Sigilito since the 50s when they moved into a 36 00:02:38,410 --> 00:02:39,830 house next door to his parents. 37 00:02:40,310 --> 00:02:43,210 Marty, as they know him, was four years old. 38 00:02:44,080 --> 00:02:47,860 We thought of the figurative children kind of like our own children. We loved 39 00:02:47,860 --> 00:02:48,860 them just as much. 40 00:02:49,760 --> 00:02:51,520 They were just like family to us. 41 00:02:53,220 --> 00:02:56,620 Here's Marty when he was, I think, about 12 years old. 42 00:02:57,000 --> 00:03:02,600 Marty is the oldest of two boys, and from a young age, he shows a penchant 43 00:03:02,600 --> 00:03:09,560 academics. He was always very brilliant scholastically, but 44 00:03:09,560 --> 00:03:11,860 he was sort of a loner type of child. 45 00:03:13,280 --> 00:03:16,720 Sigilito graduates valedictorian of his high school class. 46 00:03:17,380 --> 00:03:22,220 He goes on to get a bachelor's in classics at the University of Missouri, 47 00:03:22,220 --> 00:03:27,300 master's in European history from Cornell University, and a law degree 48 00:03:27,460 --> 00:03:28,460 Louis University. 49 00:03:29,200 --> 00:03:33,560 He speaks four languages fluently and is a member of Phi Beta Kappa. 50 00:03:33,780 --> 00:03:38,820 By the early 90s, he appears to be on his way to an illustrious career in 51 00:03:38,820 --> 00:03:39,880 international law. 52 00:03:40,410 --> 00:03:47,070 And I understood that he taught law in Austria and, I believe, Switzerland. And 53 00:03:47,070 --> 00:03:51,030 he gave some classes at Oxford in Britain. 54 00:03:52,310 --> 00:03:56,790 Former Assistant U .S. Attorney Stephen Holzhauser will later find out that 55 00:03:56,790 --> 00:04:00,830 Sigilito wasn't exactly the Oxford professor he claimed to be. 56 00:04:01,400 --> 00:04:05,740 What we came to learn was that the University of Missouri at Kansas City 57 00:04:05,740 --> 00:04:11,120 School had a two -week -long summer session where you traveled over to 58 00:04:11,120 --> 00:04:16,160 and attended, at the location of Oxford, some continuing legal education 59 00:04:16,160 --> 00:04:20,339 seminars. And Sigilito was merely a presenter at a seminar. 60 00:04:20,899 --> 00:04:25,060 But it's during his time in Oxford that Sigilito meets a friend who tells him 61 00:04:25,060 --> 00:04:29,300 about an investment program he's involved with called the British Lending 62 00:04:29,300 --> 00:04:30,300 Program. 63 00:04:30,670 --> 00:04:34,250 Basically, the British Lending Program provides the opportunity to lend amounts 64 00:04:34,250 --> 00:04:38,190 of money for short terms, usually one year, at very high interest rates. 65 00:04:38,730 --> 00:04:44,190 Interest rates range between 20 % and at times as high as 48 % on a one -year 66 00:04:44,190 --> 00:04:45,190 loan. 67 00:04:45,410 --> 00:04:49,950 Purposefully supporting or buying land and real estate projects in England. 68 00:04:51,350 --> 00:04:55,390 Cigelito's friend says he is working with a British real estate developer 69 00:04:55,390 --> 00:05:00,310 Derek Smith, who owns several valuable hotels and properties he wants to 70 00:05:00,310 --> 00:05:01,229 in the UK. 71 00:05:01,230 --> 00:05:04,530 And what he really needs is more investor cash. 72 00:05:05,310 --> 00:05:08,530 Smith thinks Cigelito could be his ticket to success. 73 00:05:09,130 --> 00:05:11,490 He was impressed by Cigelito's presentation. 74 00:05:11,850 --> 00:05:15,890 He was impressed by his education, which Mr. Smith... 75 00:05:16,160 --> 00:05:21,460 lack similar education, he was easily convinced of Sigilito's authenticity. 76 00:05:21,980 --> 00:05:25,980 And he befriended him and trusted him as well. 77 00:05:28,900 --> 00:05:33,980 When he gets back home, Sigilito starts pitching the program and Smith's 78 00:05:33,980 --> 00:05:37,640 development acumen to many of his friends and acquaintances at the 79 00:05:37,640 --> 00:05:40,880 St. Louis Racquet Club, where he's a new member. 80 00:05:41,900 --> 00:05:45,760 Mr. Sigilito was bringing in clients that could loan millions. 81 00:05:46,160 --> 00:05:50,960 He would take anything, but still he could bring in the larger amounts of 82 00:05:51,640 --> 00:05:57,100 Before long, Sigilito starts to bring in millions of dollars. And while he has 83 00:05:57,100 --> 00:05:59,880 access to the very wealthy, he doesn't discriminate. 84 00:06:01,780 --> 00:06:07,580 In 2000, Richard and Melba run into their old neighbor Marty at his 85 00:06:07,580 --> 00:06:08,580 wedding reception. 86 00:06:08,860 --> 00:06:11,860 and he begins to tell them about the British lending program. 87 00:06:12,460 --> 00:06:18,080 He gave us a spiel about how safe it was, that he had been in it for a couple 88 00:06:18,080 --> 00:06:21,020 years, and they never had had a failure. 89 00:06:21,740 --> 00:06:25,000 The couple considers the investment for nearly a year. 90 00:06:26,200 --> 00:06:32,180 Finally, they decide to cash out Richard's IRA and invest $80 ,000 with 91 00:06:32,180 --> 00:06:33,180 longtime friend. 92 00:06:33,580 --> 00:06:36,480 The interest rate on here is 21 .5%. 93 00:06:37,420 --> 00:06:44,280 And being that he was almost a close member of our family, we felt that he 94 00:06:44,280 --> 00:06:45,280 was trustworthy. 95 00:06:46,040 --> 00:06:50,280 Each month, they withdraw a small dividend and reinvest the rest. 96 00:06:50,740 --> 00:06:53,140 They are more than satisfied with the investment. 97 00:06:53,400 --> 00:06:58,900 And when they have the opportunity, they put in more, including Melba's IRA, for 98 00:06:58,900 --> 00:07:01,100 a total of more than $350 ,000. 99 00:07:01,980 --> 00:07:04,140 Monthly bank statements are reassuring. 100 00:07:04,680 --> 00:07:09,460 Since this came from the bank, it gave us a more sense of security and 101 00:07:09,460 --> 00:07:11,240 credibility that everything is okay. 102 00:07:12,740 --> 00:07:17,980 Marty makes them feel secure as well, with his spiritual guidance in church on 103 00:07:17,980 --> 00:07:21,220 topics like ethics, decency, and morality. 104 00:07:22,240 --> 00:07:24,600 He treats Richard and Melba like family. 105 00:07:25,060 --> 00:07:28,060 We had Sunday dinners with him every Sunday. 106 00:07:28,660 --> 00:07:33,340 We would go out to dinner to his clubs or to a restaurant somewhere. 107 00:07:33,930 --> 00:07:35,190 And he picked up the tab. 108 00:07:36,510 --> 00:07:41,550 When American Greed returns, Martin Sigilito is picking up tabs all over the 109 00:07:41,550 --> 00:07:44,890 place. It's easy, since it's not his money to spend. 110 00:07:45,390 --> 00:07:50,410 He was living high on the hog. Food at the racquet club, massages, $800 bottles 111 00:07:50,410 --> 00:07:51,410 of cognac. 112 00:08:01,640 --> 00:08:05,740 If you're not a member of the St. Louis Racquet Club, you might not even know 113 00:08:05,740 --> 00:08:06,699 it's there. 114 00:08:06,700 --> 00:08:12,080 But inside this unremarkable exterior is a place of distinction, a home away 115 00:08:12,080 --> 00:08:15,180 from home for St. Louis' old money power players. 116 00:08:16,800 --> 00:08:21,320 Established in 1907, some of its early members helped to fund Charles 117 00:08:21,320 --> 00:08:23,100 Lindbergh's flight across the Atlantic. 118 00:08:24,460 --> 00:08:29,100 Today, these wood -paneled walls are the domain of another high -flyer. 119 00:08:29,600 --> 00:08:34,539 A newcomer, Martin Sigilito, who has made his way onto the club's board of 120 00:08:34,539 --> 00:08:40,900 directors. His secretary, Liz Stajohar, books his appointments for massages and 121 00:08:40,900 --> 00:08:41,900 dining. 122 00:08:42,419 --> 00:08:46,580 The Rocket Club was his go -to place. Actually, it was a big deal that they 123 00:08:46,580 --> 00:08:51,080 let him be a member because he was what they call new money. 124 00:08:51,700 --> 00:08:56,000 He would go there and he would meet his clients and dine them and do his 125 00:08:56,000 --> 00:08:57,000 business there. 126 00:08:57,230 --> 00:09:01,830 Although he is an international lawyer, Sigilito's main business is an 127 00:09:01,830 --> 00:09:04,570 investment group called the British Lending Program. 128 00:09:05,230 --> 00:09:06,930 It was real estate development. 129 00:09:07,250 --> 00:09:11,250 You know, he was finding investors to send money over to England to help them 130 00:09:11,250 --> 00:09:12,250 develop properties. 131 00:09:13,350 --> 00:09:20,330 By 2007, Sigilito has convinced more than 100 people to lend $35 million 132 00:09:20,330 --> 00:09:23,570 him to his British land developer, Derek Smith. 133 00:09:24,350 --> 00:09:29,210 Said Toledo tells most investors for his services, he takes a modest fee, 134 00:09:29,390 --> 00:09:31,990 usually three to five percent. 135 00:09:32,350 --> 00:09:37,070 But with so much money coming in, he can afford to live the life of a successful 136 00:09:37,070 --> 00:09:38,530 international businessman. 137 00:09:39,830 --> 00:09:45,030 He would travel abroad to England and Israel sometimes as much as once a 138 00:09:45,110 --> 00:09:50,150 And he would always travel first class and stay at the fanciest hotels and eat 139 00:09:50,150 --> 00:09:51,210 at the nicest restaurants. 140 00:09:52,270 --> 00:09:57,030 Stajahar is impressed with her boss's success, and it's enough to convince her 141 00:09:57,030 --> 00:10:00,730 to invest and to recommend the investment to her family members. 142 00:10:00,950 --> 00:10:05,630 After all, she, like all the other investors, believes that their loan 143 00:10:05,630 --> 00:10:08,730 are backed up by valuable properties in England. 144 00:10:09,130 --> 00:10:13,370 We had an asset and liability statement showing the properties that Derek Smith 145 00:10:13,370 --> 00:10:14,430 owned in England. 146 00:10:15,650 --> 00:10:21,120 Smith's properties include the Hinton Grange Hotel, valued at more than $5 147 00:10:21,120 --> 00:10:22,120 million. 148 00:10:22,160 --> 00:10:25,500 The Little Farm Nursery, worth $15 million. 149 00:10:26,220 --> 00:10:32,060 And Bracknell, a sweeping plot of undeveloped suburbia that Sigilito 150 00:10:32,060 --> 00:10:34,280 be transformed into a residential neighborhood. 151 00:10:35,820 --> 00:10:40,540 As word of the secure, profitable British lending program begins to filter 152 00:10:40,540 --> 00:10:44,880 through St. Louis, it seems everyone wants in on Sigilito's deal. 153 00:10:45,720 --> 00:10:48,920 He seemed very knowledgeable, charismatic, professional. 154 00:10:50,160 --> 00:10:54,940 Philip Roseman learned about Martin Sigilito from a lifelong friend who's 155 00:10:54,940 --> 00:10:58,680 happy with his investment and talks up the British lending program. 156 00:11:00,320 --> 00:11:04,840 Roseman has spent 30 years in sales and development for a niche manufacturing 157 00:11:04,840 --> 00:11:08,520 business started in his father's garage in 1957. 158 00:11:09,740 --> 00:11:14,940 And it grew from a very small place to, as I say, the largest manufacturer of 159 00:11:14,940 --> 00:11:16,900 rotary dies in the world, and it still is. 160 00:11:17,400 --> 00:11:20,820 Now he's getting ready to sell his share of the profitable company. 161 00:11:21,200 --> 00:11:25,500 I was expecting, you know, to be in the $20 million -plus area, and I wasn't 162 00:11:25,500 --> 00:11:28,640 sure what I was going to do with it, but I wanted to put it somewhere as 163 00:11:28,640 --> 00:11:30,800 security while I was in another business. 164 00:11:31,600 --> 00:11:34,580 Although Roseman is not married and has no children... 165 00:11:34,990 --> 00:11:38,950 He's got an important reason for wanting to keep his money safe for the long 166 00:11:38,950 --> 00:11:39,950 term. 167 00:11:40,310 --> 00:11:46,110 Gabriel Novotny, the only son of one of his best friends, who is 27 years old 168 00:11:46,110 --> 00:11:47,350 when he meets with tragedy. 169 00:11:47,850 --> 00:11:51,310 He skied with Olympic skiers. He was captain of the crew team. He's an all 170 00:11:51,310 --> 00:11:52,430 -American everything. 171 00:11:54,850 --> 00:11:58,330 Returning from a day on the slopes, Novotny is in a car accident. 172 00:12:00,560 --> 00:12:04,960 He was just a good guy that had a freak accident that was none of his fault. 173 00:12:06,120 --> 00:12:09,120 He was in a coma for four months and wasn't supposed to live. 174 00:12:09,360 --> 00:12:12,220 And today he still can't swallow and can't speak. 175 00:12:12,920 --> 00:12:17,300 So I bought a home in Minnesota for his mother so she could be around him. 176 00:12:18,280 --> 00:12:21,700 Roseman wants his money to provide for Gabe's long -term care. 177 00:12:22,340 --> 00:12:27,100 And since personal referrals mean a lot to him, He trusts his friend's 178 00:12:27,100 --> 00:12:30,280 endorsement of Martin Segelito and the British lending program. 179 00:12:30,880 --> 00:12:36,880 The BLP was supposed to be really safe because he had a niche market in England 180 00:12:36,880 --> 00:12:41,560 with some people that did real estate development and had been doing it for 181 00:12:41,560 --> 00:12:43,640 quite some time and been very successful at it. 182 00:12:44,480 --> 00:12:49,120 When Roseman asks for information about Derek Smith's properties and development 183 00:12:49,120 --> 00:12:54,840 projects in England, Segelito promises the total asset values are at least... 184 00:12:54,880 --> 00:12:56,620 twice what investors are lending. 185 00:12:56,900 --> 00:13:03,300 So even if there was some problems here and there, it was pretty much a 186 00:13:03,300 --> 00:13:05,100 risk -free venture. 187 00:13:05,960 --> 00:13:11,060 So when this multi -million dollar ship comes in, Roseman hands over about $15 188 00:13:11,060 --> 00:13:16,360 million to the British lending program in the form of loans to Derek Smith in 189 00:13:16,360 --> 00:13:17,360 England. 190 00:13:18,220 --> 00:13:21,900 Philip Roseman plans to forget about the money until he needs it for another 191 00:13:21,900 --> 00:13:22,900 venture. 192 00:13:23,520 --> 00:13:27,580 He's so confident in the program, Roseman also recommends it to one of his 193 00:13:27,580 --> 00:13:32,140 oldest and closest friends, a bricklayer named Stanley Kulo. 194 00:13:32,840 --> 00:13:37,940 We were just talking some investment opportunities for our retirement fund, 195 00:13:37,940 --> 00:13:43,200 then he had told me about Martin's British lending program and gave me a 196 00:13:43,200 --> 00:13:45,880 details, and I said, well, I'd like to get involved in that. 197 00:13:46,840 --> 00:13:51,280 And he said, well, I'll talk to Martin and then see if he is interested in 198 00:13:51,280 --> 00:13:53,920 taking any more investors. 199 00:13:55,220 --> 00:14:00,080 Stanley sets up a meeting with Sigilito, who offers to take him on because he's 200 00:14:00,080 --> 00:14:02,260 such close friends with Philip Roseman. 201 00:14:02,520 --> 00:14:07,100 The thing that really put my mind at ease, I said, well, how safe is this? He 202 00:14:07,100 --> 00:14:09,140 said, I have my own family's money in it. 203 00:14:09,860 --> 00:14:12,860 He said, I really believe it. My own money is in this project. 204 00:14:13,470 --> 00:14:17,210 I said, okay, and then we just agreed to a certain amount that I would invest 205 00:14:17,210 --> 00:14:18,210 with him. 206 00:14:18,390 --> 00:14:22,310 And then he sent me a note. I sent him a check, and I was an investor. 207 00:14:23,030 --> 00:14:27,150 For the next several years, the two friends are satisfied with their 208 00:14:27,150 --> 00:14:29,330 and happy to see their money growing. 209 00:14:29,710 --> 00:14:32,790 Everything looked fine because we were getting statements from the bank saying 210 00:14:32,790 --> 00:14:36,530 that everything was fine. In fact, I felt good enough that I wanted to put 211 00:14:36,530 --> 00:14:37,530 money into it. 212 00:14:38,130 --> 00:14:39,790 My father just passed away. 213 00:14:40,480 --> 00:14:44,860 Like two years later, my mother passed away. So there was some inheritance that 214 00:14:44,860 --> 00:14:45,619 we got. 215 00:14:45,620 --> 00:14:47,780 Well, of course, I knew what I was going to do with my share. 216 00:14:48,260 --> 00:14:52,320 You know, I was going to give it to Martin because it would grow, you know, 217 00:14:52,320 --> 00:14:53,460 double in three years. 218 00:14:54,780 --> 00:14:58,080 Coming up next, where are the investors' millions? 219 00:14:58,960 --> 00:15:03,500 I can tell you that a large part of it went down the plumbing system of the 220 00:15:03,500 --> 00:15:04,500 racket club. 221 00:15:13,840 --> 00:15:19,440 In St. Louis, Missouri in 2009, it would be hard to find a more respected person 222 00:15:19,440 --> 00:15:25,280 than Bishop Martin Sigilito, a pillar of the community with ties to the city's 223 00:15:25,280 --> 00:15:26,280 who's who. 224 00:15:26,460 --> 00:15:31,720 Sigilito is a husband and father of four, devoted to his church and reaping 225 00:15:31,720 --> 00:15:34,820 benefits of a seemingly lucrative investment enterprise. 226 00:15:36,270 --> 00:15:41,210 But former Assistant U .S. Attorney Stephen Holzhauser says Sigilito makes 227 00:15:41,210 --> 00:15:45,390 from his British lending program by paying himself outrageous commissions. 228 00:15:45,970 --> 00:15:49,050 No one was actually entitled to know the amount of fees. He didn't want anyone 229 00:15:49,050 --> 00:15:49,869 to know that. 230 00:15:49,870 --> 00:15:54,070 He wanted to have some sense that he was taking something for himself, but he 231 00:15:54,070 --> 00:15:59,850 was taking between 15 and 32 percent as a fee for a one -year note. 232 00:16:00,690 --> 00:16:01,950 He was taking it. 233 00:16:02,280 --> 00:16:03,540 every year the note renewed. 234 00:16:03,860 --> 00:16:10,280 With 140 investors and $50 million now in the program, those fees add up to 235 00:16:10,280 --> 00:16:12,520 than $1 million every year. 236 00:16:12,800 --> 00:16:18,220 And his secretary, Liz Stajahar, notices a change in her boss's lifestyle. 237 00:16:18,820 --> 00:16:23,780 It became much more elegant. He would, you know, go to fancier restaurants. He 238 00:16:23,780 --> 00:16:29,320 joined fancier clubs. He bought fancier clothes and more antiques and more 239 00:16:29,320 --> 00:16:30,320 books. 240 00:16:30,590 --> 00:16:35,210 Sigilito is an academic with a strong interest in religious and other 241 00:16:35,210 --> 00:16:39,910 antiquities. On his monthly trips to England, he spends thousands of dollars 242 00:16:39,910 --> 00:16:41,290 adding to his collections. 243 00:16:41,870 --> 00:16:47,370 He bought a lot of books, hundreds and hundreds of books. He also bought maps, 244 00:16:47,550 --> 00:16:54,250 rugs. He was interested in obtaining the Dead Sea Scrolls. This is 245 00:16:54,250 --> 00:16:56,250 the Nuremberg Chronicle. 246 00:16:56,510 --> 00:16:57,530 It was... 247 00:16:58,400 --> 00:17:00,460 handwritten in the year 1493. 248 00:17:01,100 --> 00:17:04,339 He spent $120 ,000 just for this one book. 249 00:17:04,839 --> 00:17:09,200 And while one might think such valuable artifacts should be under glass in a 250 00:17:09,200 --> 00:17:15,180 museum, Martin Sigilito simply hoards his collections in his office for no one 251 00:17:15,180 --> 00:17:15,919 to see. 252 00:17:15,920 --> 00:17:19,740 A lot of them were just kept in boxes and crates that they came in. They would 253 00:17:19,740 --> 00:17:23,280 come in and he would look at it and just leave them there all stacked 254 00:17:23,280 --> 00:17:24,280 everywhere. 255 00:17:24,560 --> 00:17:28,880 Liz Stajahar chalks it up to one of her boss's eccentricities. 256 00:17:29,300 --> 00:17:30,300 He was successful. 257 00:17:30,380 --> 00:17:34,720 He had all these well -educated people looking up to him and investing in his 258 00:17:34,720 --> 00:17:37,440 program. And, yes, I thought he was doing really well. 259 00:17:38,460 --> 00:17:41,600 Philip Roseman also thinks Sigilito is doing well. 260 00:17:42,200 --> 00:17:47,420 The unassuming multimillionaire has invested more than $15 million and 261 00:17:47,420 --> 00:17:52,560 his money is growing by a reasonable 20 % in the booming global real estate 262 00:17:52,560 --> 00:17:57,880 market. If you know real estate developers, 20 % is not any great amount 263 00:17:58,000 --> 00:17:59,520 especially during boom times. 264 00:17:59,960 --> 00:18:04,720 Roseman believes that he's part of a small and exclusive group of investors 265 00:18:04,720 --> 00:18:07,320 are all making money with Martin Sigilito. 266 00:18:07,580 --> 00:18:12,360 When I came into town, we'd go over to the racket club, and he knew some of the 267 00:18:12,360 --> 00:18:15,080 really important people in the city and whatnot that would come by there and 268 00:18:15,080 --> 00:18:16,960 whatnot, and they'd talk and say hi and stuff. 269 00:18:18,160 --> 00:18:21,700 Sigilito tells Roseman his money is being put to work in England. 270 00:18:22,170 --> 00:18:27,690 Building homes and subdivisions developed by real estate mogul Derek 271 00:18:27,690 --> 00:18:30,550 whom Roseman believes he has lent millions of dollars. 272 00:18:31,670 --> 00:18:37,870 Then, in late 2009, Roseman needs nearly $1 million of his money back for a new 273 00:18:37,870 --> 00:18:42,290 business venture. But when he calls for the money, all he gets are excuses. 274 00:18:42,950 --> 00:18:48,310 Health problems, he fell down, hurt his hip, volcano ash that was keeping the 275 00:18:48,310 --> 00:18:49,310 airplanes from going. 276 00:18:49,850 --> 00:18:54,110 A lot of excuses that probably I didn't pay that much attention to at the time. 277 00:18:54,690 --> 00:19:00,130 Sigilito writes, I am back home but apparently suffered a mild concussion 278 00:19:00,130 --> 00:19:01,950 week when I fell in Jerusalem. 279 00:19:02,230 --> 00:19:05,990 Have been ordered to remain essentially immobilized for a couple of days. 280 00:19:06,850 --> 00:19:11,870 Then, a week later, I am still having some problems as a result of the second 281 00:19:11,870 --> 00:19:12,870 fall in London. 282 00:19:13,450 --> 00:19:17,470 Sigilito had a way of not answering a question, diverting. 283 00:19:17,830 --> 00:19:23,030 the topic, are coming up with excuses and problems and things that take the 284 00:19:23,030 --> 00:19:27,130 off of your anger and make you feel sorry for him. He's a master at that. 285 00:19:27,390 --> 00:19:32,650 As Roseman's frustration with Sigilito begins to boil over, he decides his only 286 00:19:32,650 --> 00:19:35,090 hope is to talk to the mysterious Mr. 287 00:19:35,330 --> 00:19:36,330 Smith directly. 288 00:19:36,950 --> 00:19:41,390 Well, Marty said all my money went to Derek Smith, and that amounted to pretty 289 00:19:41,390 --> 00:19:42,390 close to $15 million. 290 00:19:42,470 --> 00:19:44,470 I don't know what, $12, $14 million, something like that. 291 00:19:45,040 --> 00:19:49,420 When I couldn't get that money back, then I wanted to go after Derek Smith. 292 00:19:49,740 --> 00:19:52,580 But once again, he's put off by Sigilito. 293 00:19:53,240 --> 00:19:56,900 I apologize for not yet carrying my BlackBerry again. 294 00:19:57,160 --> 00:20:01,360 The doctor has ordered me to keep it off and put away until my blood pressure 295 00:20:01,360 --> 00:20:04,340 drops the 25 or so points it went up last month. 296 00:20:05,940 --> 00:20:10,760 After six months of excuses and delays, Philip Roseman has had enough. 297 00:20:11,310 --> 00:20:14,850 I believed him for a long time, and then when I didn't believe him anymore, I 298 00:20:14,850 --> 00:20:17,490 got hold of Sebastian Rucci and asked him to look into it for me. 299 00:20:18,530 --> 00:20:23,570 Sebastian Rucci is a lawyer Roseman has worked with in the past, as well as a 300 00:20:23,570 --> 00:20:24,570 trusted friend. 301 00:20:25,270 --> 00:20:27,690 Rucci specializes in real estate development. 302 00:20:28,590 --> 00:20:31,610 First, he wants to know more about Martin Sigilito. 303 00:20:32,639 --> 00:20:36,740 Everybody that invested trusted him and trusted him to do the things he said he 304 00:20:36,740 --> 00:20:40,520 was going to do, take the money, invest it in England, make sure that there was 305 00:20:40,520 --> 00:20:44,080 investigations being done of the properties. Everybody trusted him to do 306 00:20:44,100 --> 00:20:45,240 and he told them he was doing that. 307 00:20:46,000 --> 00:20:50,280 Then he reviews Roseman's original loan contract with Derek Smith. 308 00:20:50,580 --> 00:20:52,780 It was very sloppy, very poorly written. 309 00:20:53,280 --> 00:20:55,000 The math didn't make a lot of sense. 310 00:20:55,400 --> 00:20:59,960 Rucci is very uneasy with the deal, and since they're not getting anywhere with 311 00:20:59,960 --> 00:21:04,550 Sigilito... He advises Roseman that they need to try to get the money back from 312 00:21:04,550 --> 00:21:06,210 Smith as soon as possible. 313 00:21:06,510 --> 00:21:09,050 The first plan was to go ahead and sue Derek Smith. 314 00:21:09,310 --> 00:21:12,790 So the only document I had at that time was the loan agreement with Derek Smith, 315 00:21:12,830 --> 00:21:14,290 which I attached as an exhibit. 316 00:21:14,870 --> 00:21:15,870 We sued him. 317 00:21:16,190 --> 00:21:19,350 We had to, of course, go through this crazy process of serving somebody 318 00:21:19,350 --> 00:21:20,350 overseas. 319 00:21:21,370 --> 00:21:22,710 Next on American Green. 320 00:21:23,310 --> 00:21:27,050 Before they can sue Derek Smith, they have to find Derek Smith. 321 00:21:27,520 --> 00:21:32,080 I wouldn't go so far as saying I was walking into mafia land, but I did worry 322 00:21:32,080 --> 00:21:33,960 about my own personal safety. 323 00:21:43,440 --> 00:21:48,580 In the spring of 2010, attorney Sebastian Rucci is trying to get his 324 00:21:48,580 --> 00:21:52,360 Philip Roseman's money back from a real estate developer in England. 325 00:21:53,080 --> 00:21:57,720 He hires British lawyer Irvinder Bakshi to help him with his lawsuit against 326 00:21:57,720 --> 00:21:58,639 Derek Smith. 327 00:21:58,640 --> 00:22:03,680 When Sebastian Rucci came to me, his client, Philip Roseman, had invested 328 00:22:03,680 --> 00:22:08,980 between $16 million to $20 million, all secured against the same properties 329 00:22:08,980 --> 00:22:15,760 where Derek Smith was supposed to invest money and give a return and then repay 330 00:22:15,760 --> 00:22:16,760 the capital. 331 00:22:17,960 --> 00:22:22,000 Bakshi sends a process server to serve Derek Smith at his listed company 332 00:22:22,000 --> 00:22:27,160 address. But she quickly gets her first clue that something is very wrong. 333 00:22:27,760 --> 00:22:32,340 It was in a dilapidated condition and clearly had not been operating as a 334 00:22:32,340 --> 00:22:33,520 business for some time. 335 00:22:34,200 --> 00:22:38,080 So the first news that got back was the so -called headquarters of this company 336 00:22:38,080 --> 00:22:39,080 was abandoned. 337 00:22:39,460 --> 00:22:44,020 Not only is this supposedly the headquarters of a thriving development 338 00:22:44,120 --> 00:22:49,800 the property itself, Little Farm Nursery, is listed as a key asset of 339 00:22:49,840 --> 00:22:51,720 worth more than $15 million. 340 00:22:52,800 --> 00:22:58,100 It was a matter of huge concern that the nursery wasn't an operating business 341 00:22:58,100 --> 00:23:04,100 because what that meant for us was that there wasn't a business that was 342 00:23:04,100 --> 00:23:08,640 producing revenue or income against which we might be able to recover any 343 00:23:08,640 --> 00:23:09,640 for Mr. Roseman. 344 00:23:10,200 --> 00:23:15,360 To make matters worse, Bakshi discovers that the property is actually owned by 345 00:23:15,360 --> 00:23:16,360 Smith's son. 346 00:23:16,560 --> 00:23:21,520 who paid less than $300 ,000 for it. It showed you that there was a fraud afoot 347 00:23:21,520 --> 00:23:22,259 right there. 348 00:23:22,260 --> 00:23:25,740 And I mean, not like a little fraud, like a big fraud, because if the ground 349 00:23:25,740 --> 00:23:28,820 worth $200 ,000 or $300 ,000 and they're claiming it's $15 million, they're just 350 00:23:28,820 --> 00:23:30,760 really fattening up some big numbers. 351 00:23:31,080 --> 00:23:34,180 And so that was the start of telling you that something's really wrong. 352 00:23:34,540 --> 00:23:37,660 From there, things continue to spiral downward. 353 00:23:38,360 --> 00:23:42,120 Bakshi learns that the Little Farm Nursery isn't the only property listed 354 00:23:42,120 --> 00:23:43,980 fraudulently as an asset. 355 00:23:44,600 --> 00:23:49,060 A number of the other properties he didn't own at all. He no longer owned or 356 00:23:49,060 --> 00:23:50,060 they were derelict. 357 00:23:50,500 --> 00:23:53,940 Hinton Grange Hotel he was the owner of. 358 00:23:54,400 --> 00:23:56,300 It was a very small hotel. 359 00:23:57,060 --> 00:23:59,540 It didn't seem particularly thriving. 360 00:23:59,980 --> 00:24:01,420 He didn't run it. 361 00:24:02,200 --> 00:24:04,660 Now it's time to confront Derek Smith. 362 00:24:05,120 --> 00:24:09,080 And it's the Hinton Grange Hotel where Smith wants to rendezvous. 363 00:24:09,850 --> 00:24:14,310 As Bakshi heads out of London, she steals herself for the confrontation to 364 00:24:14,770 --> 00:24:19,870 Here I am in quite an isolated place, driving into the countryside to meet a 365 00:24:19,870 --> 00:24:24,730 whose background and history I have no knowledge of. But at that time, it 366 00:24:24,730 --> 00:24:28,150 pretty clear to me that something was very, very wrong. 367 00:24:30,130 --> 00:24:33,210 When she arrives at the hotel, she's more at ease. 368 00:24:33,650 --> 00:24:37,590 It's a quaint, if a bit run -down property set in the rolling hills of the 369 00:24:37,590 --> 00:24:38,590 English countryside. 370 00:24:39,150 --> 00:24:40,430 two hours west of London. 371 00:24:41,350 --> 00:24:45,610 It's also one of the properties listed as an asset valued at more than $5 372 00:24:45,610 --> 00:24:46,610 million. 373 00:24:48,030 --> 00:24:53,550 Here she comes face to face with 66 -year -old Derek Smith, whose demeanor 374 00:24:53,550 --> 00:24:55,190 the opposite of what she expects. 375 00:24:55,750 --> 00:25:02,650 This was a man who had a huge amount of debt that needed to be repaid to a man 376 00:25:02,650 --> 00:25:03,850 in the... 377 00:25:04,090 --> 00:25:05,530 to the tune of about $20 million. 378 00:25:06,030 --> 00:25:10,890 He exhibited no signs of stress or outward signs of stress or anxiety. 379 00:25:12,050 --> 00:25:14,850 He didn't seem worried at all. 380 00:25:15,330 --> 00:25:20,490 Smith tells Urvinder he has no idea where Philip Roseman's money has gone 381 00:25:20,770 --> 00:25:25,090 You must have received them. He said, no. I said, the company must have 382 00:25:25,090 --> 00:25:27,850 them. No, where have they gone? 383 00:25:28,270 --> 00:25:31,130 And he kept answering by saying that the Americans. 384 00:25:31,870 --> 00:25:35,170 had all the financial information, and they would send it through. 385 00:25:36,050 --> 00:25:40,950 Hard as it is to believe, Smith says he left everything up to Martin Sigilito. 386 00:25:41,050 --> 00:25:45,630 He knows nothing about the British Lending Program's investors or how much 387 00:25:45,630 --> 00:25:50,070 owed. What he admitted was that what he would do is he would sign the back page 388 00:25:50,070 --> 00:25:54,310 of these loan documents and send 30 or 40 at a time to the states, and then 389 00:25:54,310 --> 00:25:56,910 would assemble it here in St. Louis, basically. 390 00:25:57,640 --> 00:26:04,020 He had no idea as to the amount of funds that he was borrowing for the company 391 00:26:04,020 --> 00:26:10,980 and therefore no idea either as to the amount of money that he was guaranteeing 392 00:26:10,980 --> 00:26:12,820 and that he would be liable to pay back. 393 00:26:13,260 --> 00:26:17,320 And he agreed that that was the case, which I found absolutely astonishing. 394 00:26:18,040 --> 00:26:23,340 The ultimate conclusion was that Derek Smith is a patsy. He's not a ringleader. 395 00:26:23,420 --> 00:26:28,460 He is somehow involved, but he didn't get... the money or certainly didn't get 396 00:26:28,460 --> 00:26:29,460 the bulk of the money. 397 00:26:29,900 --> 00:26:34,320 That told me that whoever was doing the major fraud, the mastermind was here in 398 00:26:34,320 --> 00:26:37,960 the United States, Martin Cigillito, and that a lot of the money was either 399 00:26:37,960 --> 00:26:39,580 hidden by him or it was gone. 400 00:26:40,660 --> 00:26:45,920 Next on American Greed, Cigillito's own secretary decides it's time to take 401 00:26:45,920 --> 00:26:52,220 action. She walked into the U .S. Attorney's Office and the FBI and says, 402 00:26:52,220 --> 00:26:53,220 to tell you about something. 403 00:26:53,790 --> 00:26:57,350 What else did Martin Cigillito buy with stolen millions? 404 00:26:57,770 --> 00:27:00,870 Find out at AmericanGreed .CNBC .com. 405 00:27:01,630 --> 00:27:03,910 Want inside information from the show? 406 00:27:04,270 --> 00:27:06,150 Join the Greed social network. 407 00:27:06,610 --> 00:27:09,170 Like us on American Greed's Facebook page. 408 00:27:09,550 --> 00:27:10,550 We'll be right back. 409 00:27:15,550 --> 00:27:21,350 In May 2010, attorney Sebastian Rucci sits down with his friend and client, 410 00:27:21,490 --> 00:27:22,490 Philip Roseman. 411 00:27:22,650 --> 00:27:27,870 To let Roseman know he's been swindled out of $15 million by Martin Sigilito. 412 00:27:28,950 --> 00:27:30,670 I said, Phil, can I get an update? 413 00:27:31,030 --> 00:27:33,530 I said, today I think the money's all gone. 414 00:27:34,490 --> 00:27:38,050 It felt like a betrayal, and it was a significant betrayal. 415 00:27:38,830 --> 00:27:45,790 It took my life savings that I'd spent 20, 30 years building up, and 416 00:27:45,790 --> 00:27:48,710 it felt pretty bad, obviously. 417 00:27:50,100 --> 00:27:53,500 Phil, in his usual way, said, okay, let's go do what we got to do now. 418 00:27:53,820 --> 00:27:57,300 Which meant, let's sue him, let's prosecute him, whatever we have to do. 419 00:28:01,220 --> 00:28:05,840 Rucci knows that if they go to the authorities too soon, there may be no 420 00:28:05,840 --> 00:28:07,440 of recovering Roseman's money. 421 00:28:07,700 --> 00:28:10,900 So he decides to first deal directly with Sigilito. 422 00:28:11,160 --> 00:28:13,400 I was really pissed off that he stole Phil's money. 423 00:28:13,660 --> 00:28:15,140 And so I was just going to go after him. 424 00:28:15,640 --> 00:28:20,000 We put together various emails, one lengthy one where we detailed all our 425 00:28:20,000 --> 00:28:24,620 findings to Sigilito, his secretary, and others that were involved, and 426 00:28:24,620 --> 00:28:28,060 basically called it a Ponzi scheme right up front, because that's what I thought 427 00:28:28,060 --> 00:28:29,060 it was. 428 00:28:29,600 --> 00:28:33,860 And basically what we were trying to do is figure out, did he hide some of the 429 00:28:33,860 --> 00:28:38,020 money? So the goal at that time was to see if we could flush out some of the 430 00:28:38,020 --> 00:28:41,640 money under the theory of maybe we'll recover some percentage of it. 431 00:28:42,360 --> 00:28:47,220 For Sigilito's secretary, Liz Stajahar, who has been working for Sigilito since 432 00:28:47,220 --> 00:28:50,560 she was still in college, the accusations are unbelievable. 433 00:28:51,160 --> 00:28:52,160 I was shocked. 434 00:28:52,300 --> 00:28:53,620 I couldn't believe it. 435 00:28:54,140 --> 00:28:58,040 But Stajahar cannot overlook Sebastian Rucci's claims. 436 00:28:58,360 --> 00:29:02,340 They're based on an investigation into the value of the British Lending 437 00:29:02,340 --> 00:29:06,500 Program's properties in England that are supposedly the collateral for all 438 00:29:06,500 --> 00:29:07,500 investor loans. 439 00:29:08,300 --> 00:29:12,540 It was about $60 million we thought at that time was owed, and he said the 440 00:29:12,540 --> 00:29:14,540 assets were worth maybe a couple million. 441 00:29:15,060 --> 00:29:20,200 You know, we had all been led to believe that all these assets existed and they 442 00:29:20,200 --> 00:29:24,320 were valued much more than what they were really worth. 443 00:29:24,700 --> 00:29:29,580 It was devastating. I mean, all these people were going to lose their life 444 00:29:29,580 --> 00:29:30,580 savings. 445 00:29:31,159 --> 00:29:35,580 In fact, Liz and her immediate family members themselves have more than $300 446 00:29:35,580 --> 00:29:38,000 ,000 invested in the BLP. 447 00:29:38,640 --> 00:29:43,820 I didn't know what to do. I was so torn. You know, you have this man that you 448 00:29:43,820 --> 00:29:47,860 respect and look up to, and he's telling you this is all going to be okay, this 449 00:29:47,860 --> 00:29:51,280 is normal, and then inside you, you know it's not okay. You know, all these 450 00:29:51,280 --> 00:29:54,840 people are out their money, and how can you help them? 451 00:29:55,360 --> 00:29:56,360 What can I do? 452 00:29:57,500 --> 00:29:59,360 Stajahar decides to go to her lawyer. 453 00:30:00,040 --> 00:30:01,600 and then to the feds. 454 00:30:02,160 --> 00:30:06,360 Two days later, FBI agent Kevin Cosentino takes the case. 455 00:30:06,700 --> 00:30:08,020 I didn't know what to expect. 456 00:30:08,260 --> 00:30:12,060 You know, I didn't know if it was going to be a major case or just someone 457 00:30:12,060 --> 00:30:13,560 coming in to complain about their boss. 458 00:30:14,340 --> 00:30:20,440 On May 19, 2010, Liz Stajahar and her attorney walk into a conference room at 459 00:30:20,440 --> 00:30:24,320 the St. Louis courthouse, where the U .S. attorney's office is located. 460 00:30:25,300 --> 00:30:28,000 We're all sitting at the table about... 461 00:30:28,460 --> 00:30:29,520 four or five of us. 462 00:30:30,040 --> 00:30:33,400 And she seemed very confident, very composed. 463 00:30:34,140 --> 00:30:37,400 And she just started laying it all out for us. 464 00:30:38,820 --> 00:30:43,060 I had a lot of documentation. I had, you know, the list of all the investments. 465 00:30:43,160 --> 00:30:48,360 I had copies of loan agreements, emails with the lies about the money. 466 00:30:48,600 --> 00:30:52,320 And she showed us about $40 to $50 million going in. 467 00:30:53,100 --> 00:30:56,000 And we said, where did the money go? 468 00:30:56,810 --> 00:31:01,270 And she said it was supposed to go to England, but she believes only about 900 469 00:31:01,270 --> 00:31:02,730 ,000 of it went to England. 470 00:31:03,410 --> 00:31:07,330 And she actually knew that a lot of it went back to prior investors. 471 00:31:07,970 --> 00:31:12,210 A lot of it was spent on fees that went to Martin Cigillito. 472 00:31:12,770 --> 00:31:15,890 I was thinking, if this is real, this is pretty big. 473 00:31:16,670 --> 00:31:23,490 Within a week, the FBI secures a search warrant, and on May 24, 2010 at 7 a .m., 474 00:31:23,820 --> 00:31:28,960 FBI agents are waiting outside Martin Sigilito's office when he arrives at 475 00:31:29,700 --> 00:31:33,600 We identified ourselves and said, we'd like to talk to you. 476 00:31:34,340 --> 00:31:38,540 Most people like him, they want to know what you know. 477 00:31:39,520 --> 00:31:41,020 So they will talk to you. 478 00:31:42,540 --> 00:31:47,140 So he invited us in and we just started talking about the British lending 479 00:31:47,140 --> 00:31:48,140 program. 480 00:31:48,420 --> 00:31:52,380 Sigilito thinks the FBI are there because of Philip Roseman, who has been 481 00:31:52,380 --> 00:31:54,720 pressuring Sigilito to get his money back. 482 00:31:55,540 --> 00:32:01,020 He assumed that they contacted us and told us about Mr. Roseman's 12 million. 483 00:32:01,540 --> 00:32:05,140 So he assumed all I knew about was the 12 million in the program. 484 00:32:06,080 --> 00:32:10,680 Sigilito starts telling the agent how he's got a deal going in England that 485 00:32:10,680 --> 00:32:14,160 bring in 3 million British pounds for Roseman very soon. 486 00:32:14,920 --> 00:32:19,600 And I asked him how three million pounds was going to pay back $50 million. 487 00:32:21,360 --> 00:32:25,260 And that's when his eyes started going left to right. 488 00:32:26,180 --> 00:32:30,820 He stood up and basically said, gentlemen, I have an appointment that I 489 00:32:30,820 --> 00:32:31,639 get to. 490 00:32:31,640 --> 00:32:33,660 And he was ready to walk out. 491 00:32:35,380 --> 00:32:39,740 While the FBI conducted their search, Sigilito is free to go. 492 00:32:40,520 --> 00:32:44,900 For the next 11 months, the FBI and the U .S. Attorney's Office billed their 493 00:32:44,900 --> 00:32:45,900 case. 494 00:32:46,120 --> 00:32:51,520 We had financial analysts. We had the IRS. We had forfeiture analysts all 495 00:32:51,520 --> 00:32:53,320 working together from the seized documents. 496 00:32:54,500 --> 00:32:58,480 We had hundreds and hundreds of loan documents in boxes. 497 00:32:59,140 --> 00:33:04,080 FBI agents eventually confirmed that Sigilito's British developer, Derek 498 00:33:04,240 --> 00:33:08,460 got $2 .7 million of the $50 million taken in. 499 00:33:08,970 --> 00:33:10,070 So what happened to the rest? 500 00:33:10,330 --> 00:33:14,970 The answer, Assistant U .S. Attorney Stephen Holzhauser says, is hard for 501 00:33:14,970 --> 00:33:15,970 victims to take. 502 00:33:16,290 --> 00:33:19,410 Some of the victims would ask me, well, can you tell me what happened to my 503 00:33:19,410 --> 00:33:23,910 money? And the most basic way that I can answer it is I can tell you that a 504 00:33:23,910 --> 00:33:28,110 large part of it went down the plumbing system of the racket club. 505 00:33:29,050 --> 00:33:32,670 He would have meals custom -prepared for himself by the chef there. 506 00:33:33,110 --> 00:33:37,330 He would have special cognac purchased and brought into the club for him and 507 00:33:37,330 --> 00:33:38,330 alone. 508 00:33:38,800 --> 00:33:43,060 He got around town in a chauffeur -driven limousine, even though he had a 509 00:33:43,060 --> 00:33:46,200 driver's license and could drive and owned several vehicles. 510 00:33:46,440 --> 00:33:50,220 And he paid for those with money from the BLP. 511 00:33:50,760 --> 00:33:52,680 He also bought a second home. 512 00:33:53,280 --> 00:34:00,180 There was expensive clothing, huge credit card bills, which is day in, 513 00:34:00,200 --> 00:34:04,640 day out, expensive, extravagant expenditures and lifestyle. 514 00:34:05,530 --> 00:34:10,670 In less than eight years, Sigilito spent more than $6 million of the fees he 515 00:34:10,670 --> 00:34:15,270 collected from the investors like Philip Roseman, who had no idea he was being 516 00:34:15,270 --> 00:34:16,270 gouged. 517 00:34:16,790 --> 00:34:23,230 He mostly used my money to pay off other investors and to enjoy a very nice 518 00:34:23,230 --> 00:34:24,230 lifestyle. 519 00:34:24,550 --> 00:34:29,230 The loss of his life savings has a devastating effect on those Roseman 520 00:34:29,230 --> 00:34:34,870 about, especially Gabriel Novotny, the paraplegic son of Roseman's friend. 521 00:34:35,500 --> 00:34:37,940 who relies on Roseman for his long -term care. 522 00:34:39,679 --> 00:34:44,679 It's not as if Martin Sigilito didn't know about Gabe. He even met him and 523 00:34:44,679 --> 00:34:45,679 prayed for him. 524 00:34:46,120 --> 00:34:51,900 When he came back from his injury, he was in a wheelchair, and he couldn't 525 00:34:51,900 --> 00:34:52,900 speak, couldn't anything. 526 00:34:53,020 --> 00:34:54,820 I mean, he was a total mess. 527 00:34:55,380 --> 00:35:00,200 And Marty came over and talked about saying prayers for him at church, and he 528 00:35:00,200 --> 00:35:03,120 was actually stealing the money that was going to be that gentleman's security. 529 00:35:04,460 --> 00:35:05,460 the rest of his life. 530 00:35:05,940 --> 00:35:10,840 So, you know, there's no mercy for Martin Sigilito when it comes to 531 00:35:10,840 --> 00:35:15,820 do with any of the people that I know. And that personal one for me is just, is 532 00:35:15,820 --> 00:35:17,820 really, really very strong. 533 00:35:18,900 --> 00:35:25,900 On April 28, 2011, 62 -year -old Martin Sigilito was indicted on 22 counts of 534 00:35:25,900 --> 00:35:30,700 fraud. A week later, he turns himself in to the authorities and is booked into 535 00:35:30,700 --> 00:35:32,240 the county jail awaiting trial. 536 00:35:34,330 --> 00:35:39,570 Next on American Greed, what is a just punishment for a man who ruined lives 537 00:35:39,570 --> 00:35:41,250 devastated entire families? 538 00:35:41,650 --> 00:35:48,370 My mom and dad worked all their lives for their kids and their kids' 539 00:35:48,490 --> 00:35:49,490 kids. 540 00:35:52,210 --> 00:35:55,270 And then I let some son of a gun deal that money. 541 00:36:04,940 --> 00:36:11,600 On March 19, 2012, Martin Sigilito stands trial for orchestrating a $50 542 00:36:11,600 --> 00:36:14,860 fraud known as the British Lending Program. 543 00:36:15,380 --> 00:36:19,700 At the time, it's the largest Ponzi scheme St. Louis has ever seen. 544 00:36:20,140 --> 00:36:24,180 Former Assistant U .S. Attorney Stephen Holzhauser prosecutes the case. 545 00:36:24,560 --> 00:36:28,680 The wolf in sheep's clothing usually describes somebody that hides amongst 546 00:36:28,680 --> 00:36:30,680 sheep in order to actually attack the sheep. 547 00:36:31,180 --> 00:36:37,660 So he's disguised himself as this religious person, an attorney, a trusted 548 00:36:37,660 --> 00:36:44,020 advisor, a friend, and all of that to suck people in and to build their trust 549 00:36:44,020 --> 00:36:48,880 and to gain their trust. And then when they think he's a trusted person, that's 550 00:36:48,880 --> 00:36:49,880 when he prays. 551 00:36:50,420 --> 00:36:55,320 The prosecution's star witness is Cigelito's secretary, Liz Stajahar. 552 00:36:55,620 --> 00:36:58,080 A big part of his defense was blaming me. 553 00:36:59,240 --> 00:37:04,320 that I was destroying the program and I was ruining what he had set up for these 554 00:37:04,320 --> 00:37:06,920 people. I was just trying to save myself. 555 00:37:07,540 --> 00:37:11,420 It is true that Stajahar's hands are not completely clean. 556 00:37:12,280 --> 00:37:16,920 Between 2005 and 2008, she wrote personal checks to herself from Martin 557 00:37:16,920 --> 00:37:21,660 Sigilito's office bank account, totaling nearly $300 ,000. 558 00:37:23,520 --> 00:37:28,060 Before the trial, she pleads guilty to one count of falsifying a tax return. 559 00:37:28,710 --> 00:37:30,570 She receives five years probation. 560 00:37:31,250 --> 00:37:35,670 Federal authorities believe the theft is separate from Citilito's fraud scheme 561 00:37:35,670 --> 00:37:41,110 and that Stajahar has redeemed herself by coming forward, especially since she 562 00:37:41,110 --> 00:37:44,750 admitted her own wrongdoing, even without a deal in place. 563 00:37:45,150 --> 00:37:47,350 It could still be going on today if it wasn't for Liz. 564 00:37:47,830 --> 00:37:54,510 He could have easily gotten more investors and kept this thing afloat, 565 00:37:54,510 --> 00:37:55,510 in more victims. 566 00:37:56,380 --> 00:37:59,800 Another key witness is British real estate developer Derek Smith. 567 00:38:00,600 --> 00:38:04,940 In order to get him to agree to come to the U .S., prosecutors make a deal that 568 00:38:04,940 --> 00:38:08,000 Smith will avoid prison time if he testifies. 569 00:38:08,280 --> 00:38:10,160 He receives five years probation. 570 00:38:10,860 --> 00:38:15,080 The benefit of having him there was the jury could see that Mr. Smith wasn't 571 00:38:15,080 --> 00:38:21,820 this mastermind and that he, in fact, was used by Sigilito as 572 00:38:21,820 --> 00:38:23,800 much as the victims were to some extent. 573 00:38:26,100 --> 00:38:30,180 He was responsible for some of the lies that he told. 574 00:38:31,080 --> 00:38:36,000 Sigilito's original partner in the program, a Kansas City attorney who 575 00:38:36,000 --> 00:38:41,220 $1 .4 million from the scheme, received a three -year sentence in exchange for 576 00:38:41,220 --> 00:38:42,220 his cooperation. 577 00:38:43,060 --> 00:38:46,960 The jury finds Martin Sigilito guilty on all counts. 578 00:38:47,440 --> 00:38:52,660 Nine months later, federal judge Linda Reed sentences him to 40 years in 579 00:38:53,180 --> 00:38:57,160 and orders him to pay $34 .6 million in restitution. 580 00:38:57,660 --> 00:39:02,520 The thing that gets you about this case, and I guess makes you angry, is what a 581 00:39:02,520 --> 00:39:07,360 devastating impact it had on the lives of some of these people who really did 582 00:39:07,360 --> 00:39:09,680 nothing wrong other than trust Sigilito. 583 00:39:10,180 --> 00:39:16,240 And they are left now with what they thought were going to be retirement 584 00:39:16,240 --> 00:39:18,700 in their twilight years, and it's gone. 585 00:39:19,660 --> 00:39:25,120 While many BLP investors have no choice but to accept their fate, Sebastian 586 00:39:25,120 --> 00:39:27,640 Rucci decides he is not finished. 587 00:39:28,060 --> 00:39:31,800 He's agreed to represent the majority of victims and is setting his sights on 588 00:39:31,800 --> 00:39:36,960 recovering money from the banks, without whose negligence, Rucci says, Sigillito 589 00:39:36,960 --> 00:39:39,400 would not have been able to continue the fraud. 590 00:39:39,720 --> 00:39:43,880 If the banks had done their jobs, this would have collapsed a long time ago. 591 00:39:43,880 --> 00:39:46,480 I'd go further. Some of the banks did uncover it. 592 00:39:46,890 --> 00:39:49,630 Each one would uncover it and pass it on to the next bank. 593 00:39:49,870 --> 00:39:53,630 So it's a real shame for that because somewhere there has to be some 594 00:39:53,630 --> 00:39:54,630 accountability. 595 00:39:55,050 --> 00:40:01,390 In August 2013, Enterprise Bank settles for an undisclosed amount, which is 596 00:40:01,390 --> 00:40:02,750 distributed among the victims. 597 00:40:03,550 --> 00:40:07,510 Rucci and his team continue to pursue claims against four other financial 598 00:40:07,510 --> 00:40:13,030 institutions that he says allegedly figured out the fraud but failed to warn 599 00:40:13,030 --> 00:40:14,030 investors. 600 00:40:14,460 --> 00:40:18,680 So far, Richard and Melba, who lost most of their life savings, have recovered 601 00:40:18,680 --> 00:40:20,120 about $25 ,000. 602 00:40:20,880 --> 00:40:24,440 Now in their retirement years, they are struggling financially. 603 00:40:24,860 --> 00:40:28,440 Yet they choose to focus on what they still can do. 604 00:40:28,780 --> 00:40:35,540 We exercise daily, and we go swing dancing because we enjoy it. 605 00:40:36,020 --> 00:40:39,020 We try to do those kind of things in order to keep our mind open. 606 00:40:39,760 --> 00:40:44,420 And to keep us from dwelling on the situation that we're in. 607 00:40:45,340 --> 00:40:50,620 For 67 -year -old Stanley Kulo, he not only invested his own retirement money, 608 00:40:50,720 --> 00:40:56,280 he convinced his sister, as executor of their parents' estate, to invest their 609 00:40:56,280 --> 00:40:57,520 inheritance as well. 610 00:40:58,000 --> 00:41:02,940 My sister, she writes this check out for $300 ,000 to Martin. 611 00:41:03,580 --> 00:41:04,900 And it's gone. 612 00:41:07,850 --> 00:41:09,890 I told her that was the thing to do. 613 00:41:11,450 --> 00:41:15,470 And being a big brother, that's hard to live with. 614 00:41:16,750 --> 00:41:21,930 Six months after losing the money, Stanley Kulo's sister passes away, 615 00:41:21,930 --> 00:41:24,030 Stanley unable to make amends. 616 00:41:24,930 --> 00:41:29,830 Oh, I'm angry at myself. I don't have enough anger left to share with Martin. 617 00:41:33,210 --> 00:41:35,010 And I just... 618 00:41:35,800 --> 00:41:37,520 I'm not going to let Martin control my life. 619 00:41:38,860 --> 00:41:43,140 He is now back at work, thankful that he's still able. 620 00:41:43,580 --> 00:41:48,560 And I've been very fortunate to have work in a downed construction industry 621 00:41:48,560 --> 00:41:50,040 where it's pretty depressed. 622 00:41:50,500 --> 00:41:52,640 So I try to live one day at a time. 623 00:41:53,920 --> 00:42:00,220 For Philip Roseman, who lost $15 million, the largest amount, his focus 624 00:42:00,220 --> 00:42:02,460 rebuilding his hard -earned life savings. 625 00:42:02,700 --> 00:42:04,320 The man who took it... 626 00:42:04,570 --> 00:42:06,290 is of little consequence to him. 627 00:42:06,530 --> 00:42:09,030 Well, if he's uncomfortable now, then he's got what he deserves. 628 00:42:09,810 --> 00:42:11,250 It's not helping anybody else, though. 629 00:42:12,390 --> 00:42:14,690 I don't think of him, quite honestly. I just don't even think of him. 630 00:42:33,830 --> 00:42:36,710 Don't get taken. Be a part of the conversation on Twitter. 631 00:42:36,990 --> 00:42:38,270 Hashtag American Greed.