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admitted.” Jenkins v. McKeithen, 395 U.S. 411, 421 (1984). The complaint is
“liberally construed” in the plaintiffs “favor.” Id. The “facts alleged in the complaint”
are viewed “in the light most favorable to” the plaintiffs. H.J. Inc. v. Northwestern
Bell Tel. Co., 492 U.S. 229 (1989) (civil RICO case). The “issue is not whether a
plaintiff will ultimately prevail but whether the [plaintiff] is entitled to offer evidence
to support the claims. Indeed it may appear on the face of the pleadings that a
recovery is very remote and unlikely but that is not the test.” Scheuer v. Rhodes, 416
principles. Martin Sigillito denies material allegations, presents facts not found in the
Complaint, construes the allegations narrowly, and draws inferences in his favor. However,
what “Rule 12(b)(6) does not countenance are dismissals based on a [defendants] disbelief
of a complaint’s factual allegations.” Neitzke v. Williams, 490 U.S. 319, 327 (1989). As
shown below, the allegations in the Complaint present claims entitling the Plaintiffs to relief.
Defendant Martin Sigillito makes the novel argument that this lawsuit should be filed
in England because the fraudulent loans he originated have a forum selection clause. The
Forum Selection clause was previously identified and specifically states that “the courts of
England or the State of Missouri, U.S.A, at the lender's discretion, are to have jurisdiction
to settle any disputes which may arise. . .” [ECF Dkt #9 pg 2]. Martin Sigillito confuses civil
RICO with breach of contract claims and argues that civil RICO allows him to use American
soil as a base to commit fraud, but denies the American victims of a federal forum. This case
is underlain with false promises of buying land in England but the complaint against Martin
Sigillito is not a breach of contract from England, but about racketeering in the United States.
The Complaint alleges that “Martin Sigillito organized, operated and masterminded
a fraudulent loan program that induced individuals to loan money to an England based
plaintiff Phil Rosemann that his $15 million loan made in January 2007 to Distinctive
Properties would be used to purchase real estate in England.” (Comp. ¶ 30). Martin Sigillito
“falsely represented to each of the plaintiffs that their loan money was being borrowed by
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Distinctive Properties, to purchase real estate in England.” (Comp. ¶ 29). However, “more
than 98% of the loan money was fraudulently diverted by Martin Sigillito” to his “bank
accounts.” (Comp. ¶ 29). Some money was “disguised as interest on the loan when in fact
the money came from new loans” a “classic ‘ponzi scheme’ from inception.” (Comp. ¶ 9).
Martin Sigillito argues that Roby v. Corporation of Lloyd's, 996 F.2d 1353 (2nd Cir
1993) is “virtually identical” and requires that this case be tried in England. In Roby, the
plaintiffs signed agreements with defendant stock exchange and signed contracts with clauses
that bound them to “arbitrate in England under English law.” Id. at 1357. There is no
allegation in Roby that a third person solicited them and fraudulently diverted their money.
The Complaint alleges that Martin Sigillito “falsely represented to each of the
plaintiffs that the loan documents were signed by Derek Smith. However, Martin
Sigillito was assembling these loan documents in the United States using copies of
Derek Smith’s signature from a loan made six years earlier. A review of all fifteen
loans made from Phil Rosemann confirms that Derek Smith’s signature is identical
on each page.” (Comp. ¶ 37). Martin Sigillito seeks to use the purported forum
supported by Roby, nor any other legal authority. For example, M/S Bremen v. Zapata
Off-Shore Co., 407 U.S. 1 (1972), case which is quoted extensive by Martin Sigillito
commences with the language “that parties to a contract may” there is no authority
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given full effect” only when they are “freely negotiated” and the “international
agreement [is] unaffected by fraud.” Bremen v. Zapata Off-Shore Co., 407 U.S. 1,13
(1972). Forum selection is inapplicable “if the inclusion of that clause in the contract
was the product of fraud or coercion.” Scherk v. Alberto-Culver Co., 417 U.S. 506,
519 n.14 (1974). In Armco, Inc. v. North Atlantic Insurance Co., 68 F. Supp. 2d 330
(S.D. N.Y. 1999) the court refused to enforce a forum selection clause and concluded
that a wide ranging RICO conspiracy dispute did not arise out of an underlying sales
contract between the parties, and hence did not dictate the selection of a forum. Id.
at 338-340. The Armco opinion held that the forum selection clause was
Martin Sigillito’s office and residence are in St. Louis, he arranged many of the loans
in St. Louis, and he is properly being sued in his home town. To suggest that the American
victims must proceed in foreign soil is simply absurd. Under this logic, every defrauder could
simply create some connection to a foreign country and deny the American victims their
rights to compensation in an American court. It’s no wonder that Martin Sigillito did not
offer to sell land in Cuba in order to deny the plaintiffs any rights at all. Civil RICO provides
a proper federal remedy to Martin Sigillito’s ponzi scheme, and those claims are within this
courts original jurisdiction, 18 U.S.C. § 1964(c), and this case is properly before this court.
This case displays the breath and depth of civil RICO claims which “has
become a tool for everyday fraud cases brought against respected and legitimate
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enterprises.” Sedima v. Imrex Co., 473 U.S. 479, 499 (1985). “RICO is to be read
broadly” and Congress intended that civil RICO have precisely such a broad
application. Id. at 497-500. Moreover, the Supreme Court has repeatedly reversed
motions to dismiss civil RICO cases. See Nat’l Org. for Women v. Scheidler, 510 U.S.
because civil RICO does not require an economic motive); H.J. Inc. v. Northwestern
Bell Tel. Co., 492 U.S. 229 (1989) (reversing grant of 12(b)(6) motion in a civil RICO
that racketeering predicates must be related and pose a threat of continued activity,
or continued for an extended closed time period); Sedima, S.P.R.L. v. Imrex Co., 473
U.S. 479 (1985) (reversing dismissal of civil RICO in a garden-variety fraud and
breach of contract case); American National Bank & Trust v. Haroco, Inc., 473 U.S.
§§ 1961-68, provides for liability in civil suits brought by any person injured “in his
unlawful for “any person” who is employed by or associated with “any enterprise”
1962(c).
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Four elements are necessary for a § 1962(c) violation “(1) conduct (2) of an
Imrex Co., 473 U.S. 479, 496 (1985). See also, Craig Outdoor Adver., Inc. v. Viacom
Outdoor, Inc., 528 F.3d 1001, 1026 (8th Cir. 2008) (same).
Civil RICO liability requires the existence of an “enterprise” through which the
illegal conduct occurs. An “enterprise” is defined broadly under RICO and included
Properties engaged in international loans the used as the “enterprise” and the vehicle
through which the pattern of racketeering activity was is committed. (Comp. ¶ 62-64).
RICO makes it unlawful for any person “associated” with any RICO enterprise
through a pattern of racketeering activity, over a period of more than seven years.”
(Comp. ¶ 61). Martin Sigillito “falsely represented” to each “plaintiffs that the loan
documents were signed by Derek Smith.” (Comp. ¶ 37). Martin Sigillito “falsely
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represented Derek Smith’s involvement.” (Comp. ¶ 37). Martin Sigillito “knew that
the list of assets attached to the loans were fraudulent.” (Comp. ¶ 43). Martin Sigillito
checking tax returns, land appraisals, balance sheet and income statements and he will
gladly “share that information.” (Comp. ¶ 39). Derek Smith has confirmed he “never
received any of the funds which were lent to Distinctive Properties under the
agreements arranged by Martin Sigillito.” (Comp. ¶ 42). Martin Sigillito “used many
false means to prevent the plaintiffs from investigating the loans.” (Comp. ¶ 48).
predicate act.” Sedima v. Imrex Co., 473 U.S. 479, 495 (1985). “Racketeering
crimes, including federal mail and wire fraud (18 U.S.C. §§ 1341, 1343).
RICO includes violation of federal mail and wire fraud (18 U.S.C. §§ 1341,
The mail fraud statute prohibits the use of the mails “for the purpose of executing”
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“There are two elements of a mail or wire fraud charge: (a) a scheme to
defraud, and (2) a mailing or wire in furtherance of that scheme. Wholly intrastate use
of the mails for fraud violates the mail fraud statute. In contrast, the federal wire fraud
statute requires interstate use of the wire.” Annulli v. Panikkar, 200 F.3d 189, 200 n.9
(3d Cir. 1999). The wire fraud statute is “identical to the mail fraud statute except it
speaks of communications transmitted by wire.” U.S. v. Frey, 42 F.3d 795, 797 (3d
Cir. 1994). The “cases construing the mail fraud statute are applicable to the wire
The “scheme or artifice to defraud need not be fraudulent on its face” and
Inc., 926 F.2d 1406, 1415 (3d Cir. 1991). The “mailing need not contain any
information -- may supply the mailing element.” Id. at 1413-14. Also, each interstate
use of the telephone or “each mailing that is incident to an essential part of the
scheme constitutes a new violation.” Id. at 1413. The “scope” of the mail fraud statute
is “broad” and reaches “beyond the common law definition of false pretences.”
Tabas, 47 F.3d at 1290. The “use of the mails need not be an essential element of the
fraudulent scheme. Rather, so long as the mailings are ‘incident to an essential part
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The Complaint alleges that Martin Sigillito “falsely represented to each of the
plaintiffs that their loan money was being borrowed by Distinctive Properties, to
purchase real estate in England.” (Comp. ¶ 29). “More than 98% of the loan money
was fraudulently diverted by Martin Sigillito” to his “bank accounts.” (Comp. ¶ 29).
“had repaid many loans over the years on time and as promised.” (Comp. ¶ 32).
Martin Sigillito “knew that Distinctive Properties did not purchase or sell a single
property from the plaintiff/lenders money and did not repay a single plaintiff/lender
Some of the money was “disguised as interest on the loan when in fact the
money came from new loans confirming that the loans were a classic ‘ponzi scheme’
from inception.” (Comp. ¶ 9). Martin Sigillito represented to each Plaintiffs “that
Derek Smith used the money from the loans to acquire land and options.” (Comp. ¶
10). Martin Sigillito “knew this to be false” he knew he “would not send Derek Smith
the loan money” and “in time the ‘ponzi scheme’ would come crashing down” and
leave the plaintiffs “with worthless loans.” (Comp. ¶ 10). In time that is exactly what
happened. Martin Sigillito “defraud[ed] over 100 individuals of more than $45
million in a classic ‘ponzi scheme’ where the purported returns were paid from funds
contributed by new investors.” (Comp. ¶ 6). “Martin Sigillito fraudulently diverts the
money to his personal needs” and on one occasion he sought reimbursement of a loan
that was repaid confirming the complete “dishonesty to which Martin Sigillito will
Martin Sigillito “mailed over five hundred letters during the past seven years”
along with “over five hundred” Federal Express “packages” with copies of fraudulent
loan documents “in furtherance of their scheme to defraud the plaintiffs. (Comp. ¶ 67-
68). “Martin Sigillito sent over five hundred interstate faxes” of the fraudulent “loan
documents during the past seven years” and “over five hundred interstate faxes” to
engaged in “more than one thousand interstate telephone calls” to England and “more
than five hundred interstate telephone calls” to the Plaintiffs in furtherance of the
“scheme to defraud the plaintiffs.” (Comp. ¶ 73, 74). Martin Sigillito “sent well over
five hundred emails to the Plaintiffs during the past seven years” in furtherance of the
“scheme to defraud the Plaintiffs.” (Comp. ¶ 75). The dates contents and other
specifics of some of the emails are detailed in the Complaint. (Comp. ¶¶ 29, 32, 33,
35, 38, 40, 41, 47, 50). Martin Sigillito “sent and received well over five hundred
electronic money wire transfers” during the past seven years in furtherance of the
Martin Sigillito “committed well over two thousand separate acts of mail
1341, 1343. The mail or wire communication related to their fraudulent scheme and
was incident to an essential part of the scheme, and involved many misrepresentations
reasonably calculated to deceive the Plaintiffs. Each time a letter, fax, phone call,
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email or wire transfer was sent it deprived, or attempted to deprive, the Plaintiffs of
their money and resulted in a distinct injury to the Plaintiffs and a concommitant
The Plaintiffs have adequately alleged a cognizable scheme to defraud and the
racketeering.” Agency Holding Corp. v. Malley-Duff & Assoc., Inc., 483 U.S. 143,
racketeering activity,” i.e. two acts of extortion, or mail or wire fraud, within ten
. . must show that the racketeering predicates are related” and they either extended
H.J., Inc. v. Northwestern Bell Tel. Co., 492 U.S. 229, 239, 242 (1989).
This is commonly referred to as the “continuity plus relationship test.” Id. at 239.
“For the past seven years” Martin Sigillito committed “over two thousand
separate acts of mail and wire fraud” against the Plaintiffs and each “act of mail fraud
(Comp. ¶ 78, 80). The Complaint also alleges that Martin Sigillito committed “over
two thousand separate acts of mail and wire fraud in furtherance of the fraudulent
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scheme.” (Comp. ¶ 78). The fraudulent loan scheme is widespread and spans “more
than seven years.” (Compl. ¶ 55). The scheme “defraud[ed] over 100 individuals of
more than $45 million.” (Comp. ¶ 6). This also shows relatedness as the victims are
many and the method is the same and not isolated. The Plaintiffs have properly
The Plaintiffs also allege that Martin Sigillito’s “racketeering activity threatens
to continue unabated, driven by the possibility of repeated economic gain, and the
ability to invest the racketeering income back into the enterprise. The acts of mail
fraud and wire fraud escalated confirming” that Martin Sigillito has “no intention of
stopping the racketeering activity which by its very nature is projected into the future
RICO violation because the Defendants past conduct “by its nature project[ed] into
the future with a threat of repetition,’ thus satisfying RICO’s pattern requirement.”
6. INJURY.
Martin Sigillito’s “pattern of racketeering activity. Each act of mail or wire fraud
injured the Plaintiffs business or property and represents a discrete attempt to injure
the Plaintiffs.” (Compl. ¶ 82). The Plaintiffs have properly alleged that they have
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The RICO conspiracy statute, 18 U.S.C. § 1962(d), makes it “unlawful for any
activity. In Salinas v. U.S., 522 U.S. 52 (1997) the Supreme Court held that there “is
“conspiracy may exist even if a conspirator does not agree to commit or facilitate
each and every part of the substantive offense.” Id. at 63. The conspirators “may
divide up the work, yet each is responsible for the acts of each other.” Id. “If
conspirators have a plan which calls for some conspirators to perpetrate the crime and
others to provide support, the supporters are as guilty as the perpetrators.” Id.at 64.
The Complaint alleges that the “Defendant conspired and agreed with each
other to engage in the conduct or attempted conduct stated” in the substantive RICO
count. (Compl. ¶ 89). The Defendants “conspired and agreed to aid each other in the
wire fraud.” (Compl. ¶ 92). The “Defendants combined, conspired and confederated
with each other to commit” the racketeering activity. (Compl. ¶ 93). The allegations
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also describe the objectives of the conspiracy and the Defendant’s role in the
conspiracy. (Compl. ¶¶ 15-83). These allegations are more than sufficient to satisfy
8. CONCLUSION.
The allegations in the Complaint state sufficient claims upon which relief can
be granted, and the Plaintiffs pray that this Court deny the Motion to Dismiss.
Respectfully submitted,
CERTIFICATE OF SERVICE
I hereby certify that on August 12, 2010, a copy of the foregoing was filed
electronically. Notice of this filing will be sent to all parties via the Court’s electronic
filing system and parties may access this filing through the Court’s Case
management/Electronic Case Files (CM/ECF) found on the internet at
https://ecf.moed.uscourts.gov.
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