An out of state woman claims she lost tens of thousands of dollars after an investment company placed her money with people who were operating a Ponzi scheme, according to a recently filed St. Clair County lawsuit.
Arlene Sincoski of Florida filed a proposed class action lawsuit May 24 against Millenium Trust Company.
She is represented by Jonathan F. Andres and Nathan E. Ross of Green Jacobson in Clayton, Mo.
Sincoski alleges she entrusted her money with Millenium and allowed them to invest hundreds of thousands of dollars on her behalf. Sincoski decided to place some of her funds into a British Lending Program, which is different than investing in traditional stocks and bonds. Unlike stocks and bonds, money placed into the British Lending Program are not publicly traded and therefore require greater custodian specialization. This is where Millenium comes in, the suit claims..
“Millenium and its management held themselves out as ‘experts at custodying, or holding, alternative assets,’” the suit states. “Its website explained, ‘Alternative assets are our specialty and we offer strong expertise and knowledge’ in alternative assets.”
Millenium is designed to detect fraudulent activity with its stringent internal controls, the complaint says. It protects against fraud by, in part, sending confirmation letters to borrowers’ to ensure the receipt of lenders’ money, Sincoski claims.
However, Millenium failed to perform the required steps when Sincoski authorized it to invest money with Distinctive Properties and Broadgreen Properties, according to the complaint. If it had, it would have realized that the money was not going where stated, but instead to people who were running a Ponzi scheme, the suit states.
Martin Sigillito and Associates were the ones actually receiving the money, which they utilized to fund their Ponzi scheme, the complaint says.
When Millenium finally uncovered the scheme in 2008, the company sent a letter to its clients that told them it would no longer act as custodian to that particular account, Sincoski claims. It also completed a suspicious activity report, which it sent to banking regulators, according to the complaint.
However, in the letter, Millenium never specified why it was discontinuing its custodial duties, the suit states.
“This is most disturbing because six months before Millenium resigned, it informed Martin Siguillito of its decision which allowed him time to find a replacement custodian,” the complaint says.
It was not until May 2011 that Sincoski discovered the scheme when the United States attorney for the Western District of Missouri announced an indictment against Sigillito and his co-conspirators.
Had she known of the scheme, Sincoski claims she never would have invested her money into it. Now, there is no possibility that Sincoski can recover her money, according to the complaint.
In total, Sincoski lost $444,259, which she invested with Broadgreen Properties Limited and $14,928.30, which was invested with Distinctive Properties, the suit states. She also placed an additional $25,000 with the British Lending Program, the complaint says.
Sicoski alleges negligence, breach of fiduciary duty and unjust enrichment against Millenium.
She seeks a repayment of her damages, plus actual damages for each member of the putative class, pre- and post-judgment interest, costs, attorneys’ fees and other relief the court deems just.
St. Clair County Circuit Court case number: 12-L-277.