On April 28, 2011 an indictment was handed down in the United States District Court for the Eastern District of Missouri against Clayton lawyer, Martin Sigillito, who has been accused of mail fraud and racketeering in connection with a Ponzi scheme that he promoted in the St. Louis area. The indictment comes one year after federal agents conducted a raid on his office which seized numerous financial records and also valuable coins and other collectibles, allegedly belonging to investors.
Since the raid, numerous clients have filed legal malpractice claims against Sigillito and his
attorney-collaborators, Lynn Whaley-Vogel and Paul Vogel. These legal malpractice claims
remain pending and are unresolved. It is unclear how the indictments will impact these legal malpractice claims.
It is important to remember that lawyers act as fiduciaries for their clients. A fiduciary is a
person defined under the law as holding a position of trust over one’s person or their assets. Lawyers, by the nature of their profession, act as fiduciaries in handling client funds and client legal matters. As such, they owe a duty of care to their clients known as the “very prudent person” standard. If lawyers commit errors in the conduct of this fiduciary duty, they are subject to legal claims for malpractice.
Sigillito marketed investments in English real estate to local and out-of-state investors claiming that he would provide returns of thirty percent. He utilized the services of local lawyers Paul Vogel and his wife, Lynne Whaley-Vogel (president-elect of the Missouri Bar Association). Paul Vogel is alleged to have authored a legal opinion wherein he claimed to have conducted due diligence with respect to the investments. His opinion letter was used by Sigillito to induce other clients to invest in Sigillito’s Ponzi scheme. Lynne Whaley-Vogel is alleged to have prepared legal documents that were necessary for the investors to become involved in the scheme. Both Vogels have denied these claims and have actually sued Sigillito claiming that he forged documents without their knowledge.
Lawyers can be sued for carelessness or misrepresentation, even if they believed that a particular scheme was legitimate. They can be held responsible for violating the “very prudent man” standard when they become involved in investment schemes that lack legitimacy or have been underfunded. By making representations or authoring opinion letters, lawyers create legal documents upon which others rely in making investment decisions. If these opinions are erroneous, the lawyer can be held responsible for failing to meet a basic level of care. Clients or investors who have been harmed by a lawyer’s lack of diligence can file a legal malpractice claim seeking monetary damages for the lost investment or lost claim.
Law firms like The Meehan Law Firm are uniquely trained to handle such claims against
lawyers. Legal malpractice claims are extremely difficult and complex cases and require years of legal experience. Most law firms are reluctant to handle these claims because they either lack experience or lack the desire to sue fellow attorneys. The Meehan Law Firm specializes in handling these types of cases and can bring its 26 years of experience to bear for clients who are faced with losses due to a lawyer’s negligence. Legal malpractice claims are expensive to prosecute, as they require the services of a legal expert and often economic or accounting experts to establish client’s level of financial loss.
A recent Missouri Supreme Court opinion has made it easier for clients to sue, as they abolished a 27 year old rule that held legal clients responsible for their own negligence in causing a loss. Under the old law, if a client was negligent, then their negligence resulted in a complete bar to their claim. This is one positive development that has recently occurred. Historically, Missouri courts have been hostile to legal malpractice claims, and oftentimes grant defendant lawyers summary judgment without the benefit of a jury trial.
If you wish to know more about the Sigillito case and cases like this, or have a claim that you think may be similar to the Sigillito matter, please contact the Meehan Law Firm.