Phil Rosemann; Judith Smith; Suzanne Glisson; Clark Amos; Odis Hash; Mark Bernstein; Marie Merlotti; Robert Givens; Preston Amos; Clayton Givens; Jill Wittenmyer; Mary O'Sullivan, individually and as Trustee of the Thomas E. O'Sullivan Revocable Living Trust and Neil J. O'Sullivan Trust and Executor of Neil J. O'Sullivan Estate; Donna Hogshooter; Thomas Currier; Rudolf Ouwens; Barbara O'Hanlon, as successor co-trustee of the Angelene Block Revocable Trust and as trustee of the Barbara J. O'Hanlon Living Trust; Roy Currier; Richard Aguilar; Billy Harrison; Sheila Mays; Elaine Reed; Cindy Merlotti; Buddy Quessenberry; Dorothy Smith; Arlene Sincoski; Jerry Cronkite; Northwest Properties (1973), LTD; Marjorie Bernstein; Stanley Kuhlo; Lewis Bernstein; Brad Werner, trustee of the JH Werner Revocable Trust; Tom Bertani; Daryll Currier; Jim Neill; Lorena Messenger; Homer Smith; Henry Barthel; Casey Cook; Mark Merlotti; Donna Bertani; John Holl; Gary Smith; Charles Davis; Stanko Matayo; Carol McCarthy, as successor co-trustee of the Angelene Block Revocable Trust & co-trustee of the Carol A. McCarthy Living Trust; Delores Cook; William McLemore; Wanda Lavender; Carol Green; Lewis Vollmar; Daren Mays; William Wantling; Ben Miller; Kent Sturhahn; Sharon Cobb; Gifford ordan; Mark Cunningham; Bonita Cobb; Melba Aguilar; Thomas Barnes; Dorothy Ziegler; Leonard Roman; John Shahan; Bob Moore; Julia Barthel; Audrey Holl; Barbara Jordan; Eric Wittenmyer Plaintiffs - Appellants
St. Louis Bank Defendant-Appellee
Submitted: December 14, 2016
WOLLMAN, SMITH,  and BENTON, Circuit Judges.
case continues to chronicle the legal consequences flowing
from Martin Sigillito's Ponzi scheme known as the British
Lending Program (BLP). See, e.g., Aguilar v. PNC
Bank, N.A., 853 F.3d 390 (8th Cir. 2017); United
States v. Sigillito, 759 F.3d 913 (8th Cir. 2014).
Sigillito maintained commercial accounts at defendant St.
Louis Bank during the Ponzi scheme's life. In this case,
the plaintiffs, seeking to recoup losses due to the BLP, sued
St. Louis Bank, alleging (1) violations of Missouri's
Uniform Fiduciaries Law (UFL); (2) aiding and abetting the
breach of Sigillito's fiduciary duties; (3) conspiracy to
breach Sigillito's fiduciary duties; and (4) conspiracy
to violate the Racketeer Influenced and Corrupt Organizations
Act (RICO), 18 U.S.C. § 1962(d). The district
court granted summary judgment to St. Louis
Bank, and the plaintiffs appeal. We affirm.
Background A. Martin Sigillito and the BLP
an attorney located in St. Louis, Missouri, and J. Scott
Brown, an attorney in Kansas, formed the BLP in the late
1990s. They formed the BLP to serve as "an investment
program to facilitate loans to an English law firm . . . to
fund 'black lung' claims brought on behalf of English
coal miners. In approximately 2000 or 2001, the BLP began
marketing loans for purported investments in real estate
developments in England." Aguilar, 853 F.3d at
395. Sigillito operated the BLP from 1999 to 2010. During the
Ponzi scheme, Sigillito directed investors to deposit money
for BLP loans into his Interest on Lawyers Trust Account
(IOLTA). But instead of sending the funds to England for
investment, Sigillito fraudulently drew the funds out of his
IOLTA account for distribution to himself and others. In
2012, "Sigillito was convicted of multiple counts of
wire fraud, mail fraud, conspiracy to commit wire and mail
fraud, and money laundering because of his involvement
in" the BLP Ponzi scheme. Sigillito, 759 F.3d
St. Louis Bank's Role
2006 to 2010, Sigillito was a commercial customer at St.
Louis Bank. Sigillito's accounts at St. Louis Bank
included (1) the Martin T. Sigillito & Associates, Ltd.
business account ("Business Account"); (2) the
Martin T. Sigillito & Associates, Ltd. business checking
account ("Checking Account"); and (3) the Martin T.
Sigillito Attorney At Law IOLTA. In addition, Sigillito had
lines of credit at St. Louis Bank ("4316 Loan" and
"4382 Loan" (collectively, "MTSA Loans"))
and a Certificate of Deposit Account Registry Service
for plaintiff Phil Rosemann's money, Sigillito deposited
most of the BLP investors' funds into the IOLTA and
immediately transferred them into another account. Investors
authorized Sigillito to manage their investments for them.
Rosemann signed four handwritten authorizations directing St.
Louis Bank to follow instructions from Sigillito on specific
two St. Louis Bank employees interacted with Sigillito during
the relevant time period: Craig Hingle and Julie Ohlms.
Hingle served as a commercial loan officer at St. Louis Bank
from 2005 until 2012. Previously, Hingle worked as a loan
officer at Allegiant Bank and knew Sigillito as a trust
customer. While at Allegiant Bank, Hingle set up a commercial
line of credit for Sigillito and hired Sigillito to create a
trust for Hingle's children. During his employment with
St. Louis Bank, Hingle helped to secure and service lines of
credit for Sigillito and Rosemann. Hingle was generally aware
of the BLP and knew that Sigililto was involved with it.
was the Assistant Vice President of Treasury Management at
St. Louis Bank from 2006 to 2010. She worked with Sigillito
and Elizabeth Stajduhar, his executive assistant, on various
financial transactions, such as wire transfers, transfers
between accounts, and check cashing. Stajduhar was
responsible for reconciling Sigillito's IOLTA and
reviewing monthly account statements. Stajduhar frequently
contacted Ohlms to transfer money. At some point, Stajduhar
began stealing money out of Sigillito's accounts by
writing checks payable to "Elizabeth Perigen, " her
maiden name. Sigillito discovered Stajduhar's defalcation
and asked Ohlms to tell him if any checks payable to
"Elizabeth Perigen" were cashed. Ohlms called
Sigillito's office, spoke to Stajduhar, and asked her to
tell Sigillito that these checks were being cashed. Ohlms did
not know that Stajduhar was Perigen. Stajduhar never
explained anything about the BLP to Ohlms and "did not
want [Ohlms] to know what was going on." Nothing in
Stajduhar's "conversation with [Ohlms] suggested
that [Ohlms] knew that [Stajduhar] or somebody was
stealing-just that Sigillito wanted to know when these checks
only discussions that Stajduhar and Sigillito had with Ohlms
"concerned issues with the accounts, and at no time did
the discussions concern the BLP." At no time did
Stajduhar or Sigillito provide St. Louis Bank with any fee
deduction authorities, loan agreements, spreadsheets,
reconciliation of the IOLTA, or other BLP transaction
records, nor did they provide documentation showing where
investors thought their money was going or the intent behind
deposits. Stajduhar "never explained to anyone at [St.
Louis] Bank what was going on with the BLP borrowers . . .,
and no one explained these to [St. Louis] Bank when checks
were issued with various names in the memo lines."
Neither Stajduhar nor Sigillito informed St. Louis Bank that
Sigillito was only engaged in work for the BLP, as opposed to
other types of legal work. And they never spoke with St.
Louis Bank about how BLP investments were distributed. In May
2010, Stajduhar believed that Sigillito was defrauding his
investors; however, she never informed St. Louis Bank.
engaged in numerous transactions at St. Louis Bank,
beginning in 2006. The most relevant transactions occurred in
2008, 2009, and 2010, as thoroughly detailed in the district
court's order. See Rosemann v. St. Louis Bank,
No. 14-CV-983-LRR, Doc. 152 at 8-15 (E.D. Mo. Nov. 17, 2015).
plaintiffs filed suit against St. Louis Bank, alleging (1)
violation of Missouri's UFL ("Count I"); (2)
aiding and abetting breach of fiduciary duty ("Count
II"); (3) conspiracy to breach fiduciary duty
("Count III"); and (4) conspiracy to violate RICO
("Count IV"). St. Louis Bank moved for summary
judgment on all claims, and the plaintiffs moved for partial
summary judgment on Count I. In a 60-page opinion, the
district court granted St. Louis Bank's motion for
summary judgment on all claims and denied the plaintiffs'
motion for partial summary judgment on Count I.
plaintiffs appeal the district court's grant of summary
judgment to St. Louis Bank on all claims and the district
court's denial of summary judgment to them on Count I
review de novo a district court's grant or
denial of summary judgment." Aguilar, 853 F.3d
at 401 (quoting Myers v. Lutsen Mountains Corp., 587
F.3d 891, 892 (8th Cir. 2009)).
Count I-UFL Claim
plaintiffs argue that the district court erred in granting
summary judgment to St. Louis Bank on Count I for violations
of the UFL. They contend that the undisputed evidence
establishes that (1) Sigillito was a fiduciary of the IOLTA;
(2) Sigillito breached his fiduciary duty; and (3) St. Louis
Bank (a) had actual knowledge of Sigillito's breach, (b)
acted in bad faith, or (c) knew that Sigillito received a
benefit from the breach of his fiduciary duty.
recently set forth the state of the law regarding
Missouri's UFL in Aguilar. See 853 F.3d
at 405-06. As in Aguilar, the UFL provision at issue
If a check or other bill of exchange is drawn by a fiduciary
as such, or in the name of his principal by a fiduciary
empowered to draw such instrument in the name of his
principal, the payee is not bound to inquire whether the
fiduciary is committing a breach of his obligation as
fiduciary in drawing or delivering the instrument, and is not
chargeable with notice that the fiduciary is committing a
breach of his obligation as fiduciary unless he takes the
instrument with actual knowledge of such breach or with
knowledge of such facts that this action in taking the
instrument amounts to bad faith. If, however, such
instrument is payable to a personal creditor of the
fiduciary and delivered to the creditor in payment of or as
security for a personal debt of the fiduciary to the actual
knowledge of the creditor, or is drawn and delivered in any
transaction known by the payee ...