Ex-Sentinel chief loses bid to void conviction, 14-year prison term

1 Attorneys

#1 Attorneys Network

1 Legal - 1 Lawyers - 1 Attorneys

Injury Lawyer - Criminal - Foreclosure - Divorce


By Jonathan Stempel

<span class="articleLocation”>A federal appeals court rejected former Sentinel
Management Group Inc chief Eric Bloom’s bid to void his
conviction and 14-year prison sentence over an estimated $666
million fraud that led to the demise of his suburban Chicago
firm and a big writedown for Bank of New York Mellon Corp

The 7th U.S. Circuit Court of Appeals in Chicago on Thursday
disagreed with Bloom’s contentions that a lack of evidence,
prosecutorial misconduct and errors by the trial judge tainted
the conviction, and that the sentence was too long because the
judge miscalculated the alleged loss.

“We are extremely disappointed by the opinion and plan to
seek rehearing,” Bloom’s lawyer Len Goodman said in an email.

Bloom, 51, had been appealing his March 2014 jury conviction
on 19 fraud counts.

Prosecutors said Bloom misappropriated assets belonging to
dozens of clients, including futures commission merchants,
commodity pools and hedge funds, to fund a risky “house” trading
portfolio, and concealed mounting liquidity problems that
culminated in Sentinel’s August 2007 bankruptcy.

Sentinel was founded in 1979 by Bloom’s father, and the
Northbrook, Illinois-based firm once oversaw $2 billion of

Writing for a three-judge appeals court panel, Circuit Judge
David Hamilton said prosecutors provided “ample” evidence that
Bloom schemed to misuse customer funds, and accepted new funds
while concealing how Sentinel was “on the brink of bankruptcy.”

Hamilton said the trial judge’s refusal to instruct the jury
as Bloom had requested on a federal regulation governing some
trading practices “does give us pause,” but did not deprive the
defendant of a fair trial.

Bank of New York Mellon spent eight years litigating against
Sentinel’s bankruptcy trustee to recoup $312 million it had lent
Bloom, hoping to be treated as a secured creditor of Sentinel.

But it took a $106 million after-tax writedown last January
after 7th U.S. Circuit Judge Richard Posner said it deserved to
be a lower priority unsecured creditor, having been aware of
facts that should have led it to probe Bloom’s activity.

Bank of New York Mellon shortly thereafter agreed to
unsecured creditor status in a settlement with the trustee.

Bloom is not eligible for release until September 2027,
federal prison records show.

The case is U.S. v. Bloom, 7th U.S. Circuit Court of
Appeals, No. 15-1445.

1 Attorneys
1 Attorneys

1 Legal

#1 Attorneys Search Engine

1 Legal is part of the 1 Search Project

Practice Areas - News - Federal - State - Contact Us



1 Attorneys

#1 Attorneys Network

1 Legal - 1 Lawyers - 1 Attorneys

Injury Lawyer - Criminal - Foreclosure - Divorce


Leave a Reply