It was dry, almost absurdly complicated and a month long.
But one of the biggest fraud cases ever prosecuted in Chicago boiled down to three words prosecutor Patrick Otlewski told jurors as Eric Bloom’s $500 million fraud trial wrapped up Monday.
“Oodles of money.”
That’s what Bloom, 49, of Northbrook, allegedly made by conning investors in his North Shore investment firm Sentinel Management Group.
More than six years after Sentinel collapsed, costing its clients hundreds of millions of dollars, the balding, bespectacled former CEO Bloom sat expressionless during closing arguments in federal court Monday.
His attorneys argue that Sentinel collapsed as a result of the worldwide 2007 credit crunch, which they called a “tsunami . . . a one of a kind, 100-year financial crisis.”
But prosecutors said the market crash merely exposed weaknesses at Sentinel caused by Bloom’s fraud.
Though Sentinel boasted that in nearly three decades of business it had “never lost a dime” of its client’s funds, Bloom for years secretly used customer cash as collateral for huge bank loans that he in turn used to make risky leveraged bets for his family’s benefit, they alleged.
The New Trier High School graduate covered losses by “robbing Peter to pay Paul,” deciding which clients should get larger returns and which should suffer based on his own interests, rather than the performance of each client’s investments, Otlewski said.
Even when it became clear in August 2007 that his bad bets would destroy Sentinel, he ignored legal advice and continued to accept deposits of more than $100 million, all of which was lost, Otlewski said.
“Sentinel was sinking faster than the Titanic but he didn’t tell the people on board — he didn’t tell his customers,” the prosecutor said.
But defense attorney Terry Campbell said Bloom could not be convicted because he acted in “good faith.”
Though Bloom was in Africa on his honeymoon as the crisis deepened in the month leading up to Sentinel’s collapse, “inattentiveness is not a crime,” Campbell told jurors. “It’s not a crime to lose money on investments,” he added.
Campbell blamed Sentinel’s Chief Financial Officer, Charles Mosley, for wrongdoing, telling jurors that trusting Mosley was “Bloom’s mistake.”
Mosley previously agreed a plea deal under which he agreed to cooperate with prosecutors.
Jurors are due to hear a rebuttal argument from prosecutors Tuesday morning before beginning their deliberations.
If convicted, Bloom faces up to 20 years in prison on each of 18 wire fraud counts, up to five years for investment advisor fraud, plus a huge fine.