(Reuters) - Eric Bloom, a former Chicago-area money manager convicted of fraud, is an “unrepentant con man” who should spend at least 20 years in prison and repay $665.9 million to his victims, federal prosecutors said.
The sentencing recommendation for Bloom, the former chief executive officer of Northbrook, Illinois-based Sentinel Management Group Inc, was disclosed late Monday. A week earlier, Bloom’s lawyers had said a maximum three-year prison term plus “significant” community service was appropriate.
Prosecutors said that while federal guidelines recommended life in prison, a 20-year term was “just punishment” despite Bloom’s seeming lack of remorse.
“Bloom’s refusal to acknowledge, even to this day, that his fraudulent representations, and his concealment of material facts, caused victim losses in this case shows him for what he is - an unrepentant con man,” prosecutors said.
Bloom, 49, is free on bond and expected to be sentenced on Dec. 8 by U.S. District Judge Ronald Guzmán in Chicago.
A federal jury on March 25 found Bloom guilty of 18 counts of wire fraud and one count of investment adviser fraud, deliberating less than two hours after a four-week trial.
Prosecutors said Bloom misused funds belonging to futures commission merchants, commodity pools, hedge funds and other customers to obtain a credit line for and run a “house” trading portfolio filled with risky and illiquid securities.
They said Bloom later concealed Sentinel’s deteriorating finances, culminating in its Aug. 17, 2007 bankruptcy.
Sentinel’s website once claimed that the firm had “never lost a dime” of client funds since its founding in 1979. The firm once oversaw about $2 billion.
In court papers, Bloom’s lawyers called their client a “good and decent man” who has shown “sincere regret” to those he let down.
They also said punishments imposed in 21 other big financial frauds, including to former WorldCom Inc CEO Bernard Ebbers and former SAC Capital Advisors LP portfolio manager Mathew Martoma, suggest a prison term “well below 10 years” was appropriate.
Bloom himself asked Guzmán for leniency.
“Each and every day of the 7 plus years that have lapsed, I have been tormented by every facet of Sentinel and its collapse,” Bloom wrote on Nov. 24. “I do recognize that my failings have caused pain and harm to others.”
Charles Mosley, once Sentinel’s head trader, will be sentenced on Dec. 17, following his Oct. 2013 guilty plea to two fraud counts.
The case is U.S. v. Bloom, U.S. District Court, Northern District of Illinois, No. 12-cr-00409.
Reporting by Jonathan Stempel in New York; Editing by Alan Crosby