Mark Bloom, a fund manager who stole more than $20 million from clients and then sought leniency by helping prosecutors build fraud cases against ex-colleagues, was sentenced to three years in prison.
Bloom pleaded guilty in 2009, admitting he stole from investors in North Hills LP, a fund he founded that once had more than $40 million under management. Soon after his arrest, he began cooperating with prosecutors and providing evidence against others at two firms where he’d worked, WG Trading Co. and accounting firm BDO Seidman LLP, prosecutors said.
U.S. District Judge John Koeltl in Manhattan said it “wouldn’t be a reasonable sentence” if Bloom dodged prison after stealing so much money.
“I deeply regret my actions,” Bloom said in court. “Over the last 6 1/2 years, I’ve been in my own prison.”
Bloom’s crimes were largely committed at North Hills, which he ran until his arrest, prosecutors said. He treated investors’ money “as a personal slush fund which he used to fund an increasingly lavish lifestyle,” they said in court papers.
Victims of the fraud urged Koeltl to lock Bloom up. Joseph Borini, a former trustee of the Alexander Dawson Foundation, which supports schools in Colorado and Nevada, said it lost $8.5 million in the scheme.
“The victims have not received any money,” Borini said in court. “He’s only had to turn over money that was never his to begin with.”
Prosecutors said Bloom’s fraud enabled him to buy a luxury Manhattan apartment, renovate a property in the Hamptons and purchase jewelry and art.
Bloom’s cooperation in fraud investigations of ex-colleagues was “timely” and “complete,” Assistant U.S. Attorney Jessica Masella told the judge, urging that his helpfulness be taken into account.
Bloom helped prosecutors gather evidence against his former WG Trading colleagues, who defrauded investors of more than $800 million, prosecutors said in court papers. Ex-WG Trading money manager Stephen Walsh was sentenced last year to 20 years in prison, and his colleague, Paul Greenwood, got 10 years. Both pleaded guilty.
Bloom’s cooperation extended to his work at BDO Seidman, where he helped market tax shelters designed to mislead the Internal Revenue Service and reduce clients’ taxes, the government said. Prosecutors have brought tax-fraud cases against former executives of the accounting firm.
The case is U.S. v. Bloom, 09-cr-00367, U.S. District Court, Southern District of New York (Manhattan).
(An earlier version of this story corrected the headline.)