Editor's note: This Shark feels that it would be appropriate for the FEDs to convict the perps in the Probate Court of Cook County who bilked and defrauded the Gore, Sykes, Tyler and Wyman families. Lucius Verenus, Schoolmaster, ProbateSharks.com
Jury takes 3 hours to convict Northbrook money manager of fraud
(Tribune illustration)
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The onetime head of a well-connected Northbrook money management firm lowered his head and stared at the floor as he was convicted Tuesday on all counts for bilking clients of more than $500 million in what prosecutors believe was the largest fraud case ever brought in federal court in Chicago.
Despite hearing evidence for four weeks, the jury acted swiftly, deliberating only about two hours before finding Eric Bloom guilty on 18 counts of wire fraud and one count of investment adviser fraud.
As the jury was polled on its verdict, several of Bloom’s family members sobbed. Moments later, his mother wailed hysterically. Her screams continued for several minutes after she was escorted into the hallway.
Later, Richard Yule, the jury’s foreman, told reporters in the lobby of the Dirksen U.S. Courthouse that it was difficult to hear the family’s heartbreaking reaction but that jurors considered the evidence overwhelming against Bloom.
“I felt for her,” Yule, 68, a retired teacher from Naperville, said of Bloom’s mother. “But throughout the trial, we had to differentiate him as a person with him as a CEO.”
Prosecutors alleged that Bloom, then head of Sentinel Management Group Inc., secretly began exposing his well-heeled customers to an increasingly risky mix of leveraged deals in 2003, leading to the company's spectacular collapse four years later.
According to the charges, Bloom and Charles Mosley, Sentinel’s head trader, pledged hundreds of millions of dollars worth of client funds as collateral for a multimillion-dollar bank loan. The money from the loan was then used to purchase high-risk securities for a “house” trading portfolio that benefitted Sentinel's officers, including Mosley, Bloom and Bloom’s father, Philip, who founded the company in the 1970s butwas not charged with wrongdoing. He was also in the courtroom with other family members for the verdict.
Prosecutors said the younger Bloom and Mosley never told clients how much risk they were being exposed to and used false account statements to lull them into pouring more money into Sentinel. As the heavily leveraged trading strategy went awry amid the global mortgage crisis, emails and phone calls showed a jittery Bloom growing increasingly desperate, they said.
“Ask (my assistant) to look in my couch for spare change,” Bloom was quoted in court filings as telling Mosley during a call days before Sentinel’s collapse.
In his closing argument earlier Tuesday, Assistant U.S. Attorney Clifford Histed told the jury that Sentinel was “sinking like the Titanic“ well before the global credit crisis and that merely exposed the fraud Bloom had been carrying out for years.
Bloom's attorney, Theodore Poulos, argued that Bloom was making decisions in a complex financial market without the “benefit of hindsight” like prosecutors. He said the fact that Sentinel was using clients' funds to leverage other loans was properly disclosed in documents and included in contract language sent to investors by the firm.
Bloom, 49, who remains free on a $100,000 bond secured by his Northbrook home, left the courthouse without comment Tuesday. A sentencing date was not set.
Mosley, 50, of Vernon Hills, pleaded guilty last October to two counts of investment adviser fraud and is awaiting sentencing. He had agreed to cooperate against Bloom, but prosecutors never called him to testify at trial.
jmeisner@tribune.com
Despite hearing evidence for four weeks, the jury acted swiftly, deliberating only about two hours before finding Eric Bloom guilty on 18 counts of wire fraud and one count of investment adviser fraud.
As the jury was polled on its verdict, several of Bloom’s family members sobbed. Moments later, his mother wailed hysterically. Her screams continued for several minutes after she was escorted into the hallway.
Later, Richard Yule, the jury’s foreman, told reporters in the lobby of the Dirksen U.S. Courthouse that it was difficult to hear the family’s heartbreaking reaction but that jurors considered the evidence overwhelming against Bloom.
“I felt for her,” Yule, 68, a retired teacher from Naperville, said of Bloom’s mother. “But throughout the trial, we had to differentiate him as a person with him as a CEO.”
Prosecutors alleged that Bloom, then head of Sentinel Management Group Inc., secretly began exposing his well-heeled customers to an increasingly risky mix of leveraged deals in 2003, leading to the company's spectacular collapse four years later.
According to the charges, Bloom and Charles Mosley, Sentinel’s head trader, pledged hundreds of millions of dollars worth of client funds as collateral for a multimillion-dollar bank loan. The money from the loan was then used to purchase high-risk securities for a “house” trading portfolio that benefitted Sentinel's officers, including Mosley, Bloom and Bloom’s father, Philip, who founded the company in the 1970s butwas not charged with wrongdoing. He was also in the courtroom with other family members for the verdict.
Prosecutors said the younger Bloom and Mosley never told clients how much risk they were being exposed to and used false account statements to lull them into pouring more money into Sentinel. As the heavily leveraged trading strategy went awry amid the global mortgage crisis, emails and phone calls showed a jittery Bloom growing increasingly desperate, they said.
“Ask (my assistant) to look in my couch for spare change,” Bloom was quoted in court filings as telling Mosley during a call days before Sentinel’s collapse.
In his closing argument earlier Tuesday, Assistant U.S. Attorney Clifford Histed told the jury that Sentinel was “sinking like the Titanic“ well before the global credit crisis and that merely exposed the fraud Bloom had been carrying out for years.
Bloom's attorney, Theodore Poulos, argued that Bloom was making decisions in a complex financial market without the “benefit of hindsight” like prosecutors. He said the fact that Sentinel was using clients' funds to leverage other loans was properly disclosed in documents and included in contract language sent to investors by the firm.
Bloom, 49, who remains free on a $100,000 bond secured by his Northbrook home, left the courthouse without comment Tuesday. A sentencing date was not set.
Mosley, 50, of Vernon Hills, pleaded guilty last October to two counts of investment adviser fraud and is awaiting sentencing. He had agreed to cooperate against Bloom, but prosecutors never called him to testify at trial.
jmeisner@tribune.com
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