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Bakshi inquired where the millions in American loans had gone. Smith had signed the agreements, hadn't he? Well, yes and no, Smith replied. He said he did sign stacks of papers, but any contracts would've been collated back in the United States. He had no copies.
"He seemed rather calm and unemotional," Bakshi says. "I would not, in his shoes, have been so calm. I would've expected him to have more knowledge than he did."
Bakshi noticed something troubling about the loan agreements. "If you sign a bunch of documents, it's highly unlikely that your signature will start at the same exact position on the page," says Bakshi. "Some of them look as though they were photocopies."
Smith would later confirm just that in an e-mail to Rucci: "I am in the ludicrous situation of having foolishly signed batches of signature last pages of agreements, with little or no knowledge of who [the] lenders were, or in fact what amounts were being borrowed."
Then, three days after this meeting, came the real shocker.
Rucci finally received a full accounting of what happened with Phil Rosemann's money on May 8. According to Sigillito's own records, Derek Smith — held out as the shrewd man behind the curtain — had only received $910,000 from all American investors combined since 2003, and only spent $186,000 on options.
Of Phil Rosemann's $15 million investment, Sigillito kept $2.6 million of it for himself, the document shows.
On May 13, Becker wrote to Vogel: "Paul, as I said to Marty earlier, the wolves are at the door but not in the house. Rosemann is not the only wolf but he is the biggest and he is moving faster and more aggressively then the others but make no mistake, they are coming too."
He continued: "You both need to keep in mind that Rosemann and Rucci believe this is a scam.... I know these are hard words but I need to make sure everyone understands."
Rucci was sure he understood perfectly. The actions of Sigillito and Vogel, he wrote, constituted "an international fraud that would shock even Charles Ponzie.... You have acted with gross self-interest." He filed a racketeering complaint on behalf of Rosemann and dozens of other investors on June 30.
In an interview with the RFT, Sigillito's local attorney, David Helfrey, denies that the program was a Ponzi scheme from inception. Asked why all the American lenders Sigillito had recruited were no longer receiving interest checks, Helfrey said only, "That's something you need to ask the person they loaned money to, Derek Smith."
Reached by phone in England, Derek Smith had little to say. "I don't know what's happening in the States," he said. "I know there's an FBI investigation, but I'm being kept at arm's length, and I can't comment."
Rucci, spearheading the civil suit on behalf of dozens of investors, believes that everyone was duped by Sigillito — even, to some extent, Derek Smith.
"Not only did Marty bamboozle the victims," Rucci says. "He bamboozled the co-defendants. That's how good he was."
"Marty had been asking me to go out and raise some money because notes were coming due," Millsap recalls over the phone in a rural drawl, between drags of a cigarette. He'd personally put in $87,000 and convinced other Arkansans to fork over millions, receiving up to 5 percent commission.
But then Millsap grew suspicious. He refused Sigillito's request to find new lenders. "I smelled dirty diapers," says the 66-year-old insurance salesman. "That's when I decided to go up and have an eyeball-to-eyeball with him."
Millsap and a companion drove up to St. Louis. As was his wont, Sigillito took them out to lunch at the Racquet Club.
"He made a big point to call everybody by name, and they all knew him," Millsap recalls, adding that Sigillito insisted on showing them a plaque commemorating his grandfather's contribution to Charles Lindbergh's historic transatlantic flight. "I went, 'Yeah, well, OK, let's talk business.'"
And Sigillito did, reassuring them that all was well, thanks to a new commitment: A group of Palestinians was willing to pump $5 to $15 million into the program. Sigillito flourished a document to prove it.
"After two hours of talking," Millsap reports, "we climbed back in the car to drive home to Arkansas, and the first thing my friend told me was, 'That guy's blowing smoke up somebody's ass.' And I said, 'OK, that's my impression too.'"
The next day, Millsap got an unexpected call. It was Sigillito's long-time secretary, Liz Stajduhar.
"She was nervous and said something wasn't right," Millsap says. They conferred and decided the Palestinian document was phony. "Then she started calling me darn near every day. I told her to start making copies and find an attorney."
On May 17, after concluding once and for all that the program was a scam, Stajduhar finally heeded Millsap's advice. She arranged to meet with an old friend, attorney Ethan Corlija, who's perhaps best known for representing notorious kidnapper and child molester Michael Devlin in 2007.
At a meeting in Corlija's Clayton office late that evening, Stajduhar told her story.
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