Bankrupt Sentinel Management Group Inc.’s chief executive officer, Eric A. Bloom, and head trader were charged with fraud related to the cash management firm’s 2007 collapse, federal authorities said.
Bloom and Charles K. Mosley were indicted yesterday by a federal grand jury in Chicago for allegedly making false statements to investors and understating the potential risks, according to the indictment.
Bloom, 47, and Mosley, 48, “participated in a scheme to defraud and to obtain money and property of prospective customers” using “fraudulent pretenses, representations and promises,” eventually gathering more than $500 million, according to the indictment.
The two face charges of bilking more than 70 customers in “one of the largest criminal financial fraud cases ever prosecuted in federal court in Chicago,” according to a statement today from Patrick J. Fitzgerald, U.S. attorney for the Northern District of Illinois.
Bloom and Mosley each face 18 counts of wire fraud and one count each of securities fraud and making false statements, prosecutors said. Each wire fraud count carries a maximum sentence of 20 years in prison.
Bloom didn’t immediately respond to a voice-mail message seeking comment on the indictment that was left at a number listed for his residence in Northbrook, Illinois. A listing for Mosley of Vernon Hills, Illinois, wasn’t available.
The telephone has been disconnected at company headquarters in Northbrook.
The case is U.S. v. Bloom and Mosley, 12-cr-409, U.S. District Court, Northern District of Illinois, Eastern Division (Chicago).