Collapsed firm's ex-head trader pleads guilty
Will testify against Sentinel's former CEO, 6 years after their alleged fraud led to company's bankruptcy
(Tribune illustration)
|
The former head trader of a well-connected Northbrook money management firm that collapsed in spectacular fashion six years ago pleaded guilty Tuesday in what has been described as one of the largest financial fraud cases ever prosecuted in Chicago's federal court.
In pleading guilty to two counts of investment fraud, Charles Mosley admitted he helped scam about 70 customers of Sentinel Management Group Inc. out of more than $500 million with highly risky investments, ultimately leading to the company's bankruptcy.
Mosley, 49, of Vernon Hills, has agreed to testify against his former boss, ex-Sentinel CEO Eric Bloom, at his trial in February, prosecutors said. In exchange for Mosley's cooperation, prosecutors said they plan to seek a 10-year prison sentence from U.S. District Judge Ronald Guzman. Mosley could have faced decades in prison if convicted of the multiple charges he first faced.
After his guilty plea at the Dirksen U.S. Courthouse, Mosley, accompanied by his attorney, attempted to elude reporters waiting outside Guzman's 12th-floor courtroom by ducking into a back hallway. He eventually exited through the first-floor lobby without comment.
The case stems from the sudden collapse of Sentinel, a firm set up in 1979 by Bloom's father, Philip, to manage short-term investments for futures brokers who traded on the Chicago Board of Trade and the Chicago Mercantile Exchange. The idea was to give them a safe, reliable place to park their cash, and Sentinel promised to invest only in top-quality securities.
Sentinel tanked in August 2007 when a risky, heavily leveraged trading strategy instituted by Bloom and Mosley went awry amid the global mortgage crisis, authorities said in announcing the criminal charges last year.
Mosley's 39-page plea agreement laid out several conversations he had with Bloom or a company director that were captured on Sentinel's recorded phone lines. In one call on Aug. 8, 2007, Mosley updated his boss on the deep losses they were taking on trades.
"Ask (my assistant) to look in my couch for spare change," Bloom was quoted as telling Mosley during the call.
Bloom, 48, of Northbrook, is charged with 18 counts of wire fraud, one count of securities fraud and one count of making false statements to an employee pension plan. He has pleaded not guilty and is scheduled to go to trial Feb. 24.
In pleading guilty to two counts of investment fraud, Charles Mosley admitted he helped scam about 70 customers of Sentinel Management Group Inc. out of more than $500 million with highly risky investments, ultimately leading to the company's bankruptcy.
Mosley, 49, of Vernon Hills, has agreed to testify against his former boss, ex-Sentinel CEO Eric Bloom, at his trial in February, prosecutors said. In exchange for Mosley's cooperation, prosecutors said they plan to seek a 10-year prison sentence from U.S. District Judge Ronald Guzman. Mosley could have faced decades in prison if convicted of the multiple charges he first faced.
After his guilty plea at the Dirksen U.S. Courthouse, Mosley, accompanied by his attorney, attempted to elude reporters waiting outside Guzman's 12th-floor courtroom by ducking into a back hallway. He eventually exited through the first-floor lobby without comment.
The case stems from the sudden collapse of Sentinel, a firm set up in 1979 by Bloom's father, Philip, to manage short-term investments for futures brokers who traded on the Chicago Board of Trade and the Chicago Mercantile Exchange. The idea was to give them a safe, reliable place to park their cash, and Sentinel promised to invest only in top-quality securities.
Sentinel tanked in August 2007 when a risky, heavily leveraged trading strategy instituted by Bloom and Mosley went awry amid the global mortgage crisis, authorities said in announcing the criminal charges last year.
Mosley's 39-page plea agreement laid out several conversations he had with Bloom or a company director that were captured on Sentinel's recorded phone lines. In one call on Aug. 8, 2007, Mosley updated his boss on the deep losses they were taking on trades.
"Ask (my assistant) to look in my couch for spare change," Bloom was quoted as telling Mosley during the call.
Bloom, 48, of Northbrook, is charged with 18 counts of wire fraud, one count of securities fraud and one count of making false statements to an employee pension plan. He has pleaded not guilty and is scheduled to go to trial Feb. 24.
No comments:
Post a Comment
Thank you for commenting.
Your comment will be held for approval by the blog owner.