Convicted of biggest fraud in Chicago history, financier fears prison
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Balding, bespectacled and conservatively dressed, Eric Bloom looks the embodiment of a middle-aged, north suburban CEO.
He isn’t loud, brash or otherwise especially memorable. Outside of his family, a handful of friends and business associates and the people whose money he lost, few people would likely recognize the 49-year-old’s name, let alone his face.
But when he’s sentenced, it will be for a doozy: The biggest financial fraud case ever brought in Chicago.
Investors lost more than a half-billion dollars when Bloom’s Sentinel Management Group collapsed in 2007, a collapse that presaged the worldwide credit crunch.
Though the cash management firm boasted it was a fortress that had “never lost a dime” of its clients’ cash in 30 years of low-risk business, Bloom dishonestly built it into a highly leveraged “house of cards” that blew away when the economy started to sour, prosecutors said when Bloom was convicted last year.
Now, the government says, Bloom deserves to spend at least 20 years in prison, calling him an “oblivious” fraudster who continues to see himself as the real victim.
Bloom was due to be sentenced Tuesday afternoon, but that was thrown into doubt Tuesday morning, when U.S. District Judge Ronald Guzman ordered the hearing be delayed.
The 20-year sentence prosecutors are demanding is an unusually stiff request for a white collar crime case involving a first time offender. While federal sentencing guidelines potentially call for a life sentence for Bloom, first-time fraudsters typically serve far shorter terms — if they do time at all.
Bloom’s lawyers want Guzman to impose a sentence of just three years, plus community service.
They say Bloom, of Northbrook, didn’t get rich, and that he’s a remorseful and “dignified” father of three who now makes a “modest” living teaching children to ride horses.
His conviction after a monthlong jury trial left him “shocked” and “dumbfounded,” he told a probation officer, court records show.
And in a letter to the judge last month Bloom said he was “afraid” of prison and “extremely anxious and likely depressed.”
“I’ve spent the last seven years waiting to wake up from what seems like a horrible nightmare,” he added. “I feel like I’m watching a movie instead of living my life.”
Prosecutors noted that “the words ‘I’ and ‘my’ appear dozens of times throughout the letter in which Bloom describes his own suffering,” adding that Bloom had barely acknowledged his victims.
Jurors needed only three hours of deliberations last year to decide that Bloom destroyed his business by illegally using client funds as collateral for loans that he used to make bets on the securities market.
For a while, the bets paid off. Bloom’s parents made more than $10 million from Sentinel’s “house account” during the four-year fraud, and Bloom himself made $700,000, evidence showed.
All the while, he strung along key investors by artificially boosting their returns at the expense of less favored clients.
But when the market crashed, Sentinel could not repay the huge loans Bloom had secretly used client funds to secure, and it collapsed.
In calling for a 20-year sentence, Assistant U.S. Attorney Cliff Histed wrote in advance of Tuesday’s hearing that “No rational investor would have invested their own money, or money that had been entrusted to their care, with Sentinel if they understood how Bloom actually operated Sentinel.”
Bloom’s failure to acknowledge that they were the true victims, he said, was “astonishing.”