BELLEVILLE, Ill. (CN) – Millennium Trust Company’s IRA investments were part of a giant Ponzi scheme, a class action claims in St. Clair County Court.
Arlene Sincoski claims the money was to be invested in real estate projects in England through the British Lending Program.
But actually, Sincoski says, it was a scheme perpetrated by St. Louis attorney Martin Sigillito and Kansas attorney Scott Brown, who once practiced law in England.
Neither attorney is named as a party to the case.
“If Millennium, or its auditors, had undertaken the proper audit steps that would have uncovered that Distinctive Properties never received the money which Millennium reported in the IRA account holders’ monthly account statements as having been received by Distinctive Properties,” the complaint states. “If Millennium had performed its duties, Millennium would have realized the fraud and, in turn, the plaintiffs would not have invested, nor renewed, their loans or made additional cash investments in the British Lending Program.”
Sincoski claims Millennium never revealed Sigillito’s wrongdoing, but simply sent a letter to its clients stating: “Due to the administrative complexities in acting as the custodian of certain offshore promissory notes, Millennium has decided to no longer custody these assets. Therefore, Millennium hereby resigns as the custodian of your IRA account.”
Only after Sigillito was indicted and the case was unsealed in the Eastern District of Missouri in May 2011 were the details of the scheme revealed, according to the complaint.
Sigillito, 63, pleaded guilty to 20 counts of wire fraud, mail fraud, conspiracy and money laundering and is awaiting sentencing, the complaint states. Prosecutors said the $52 million Ponzi scheme was the largest in Eastern District of Missouri history.
Brown also pleaded guilty to mail fraud and wire fraud, according to the complaint.
Sincoski claims that Bradgreen Properties, Distinctive Properties, Sigillito and Brown are effectively insolvent.
“This action is brought by Sincoski against Millennium to recover for herself and for all others similarly situated … all principal they invested in and all interest due under the British Lending Program, together with prejudgment and post-judgment interest,” the complaint states. “Sincoski contends that Millennium voluntarily and on the authority and for the account of those individuals in the plaintiff’s class undertook to manage and effectuate their investments in the British Lending Program and that the parties thereby established a relationship of principal and agent. Sincoski further contends that because Millennium voluntarily acted as agent for the plaintiff’s class, a fiduciary relationship exists as a matter of law. Finally, as more fully alleged below, Sincoski contends that Millennium was negligent, breached its fiduciary duty, and acted in a manner deserving of an award of punitive damages.”
The class consists of anybody who invested money from an IRA account into the British Lending Program for the benefit of Millennium. The class seeks actual and punitive damages for negligence, breach of fiduciary responsibility and unjust enrichment. Sincoski in particular seeks $484,000 in unpaid principal, $269,000 in interest and $2.26 million in punitive damages. The class is represented by Jonathan Andres, with Green Jacobson in Clayton, Mo.
A similar complaint was filed against Millennium in the same court by Sharon and John Shahan. The Shahans seek $842,000 in actual damages and $2.5 million in punitive damages for similar claims. The civil complaint, which is not a class action, was also filed by Andres.