Sentinel Management CEO Eric Bloom Sentenced to 14 Years for $665 Million Fraud Before 2007 Collapse

Case from 2014–2017 (U.S. Attorney's Office latest release: Jan. 30, 2015; later developments are from court records and other sources cited below). Published on Scammers.com Oct. 16, 2026; case status is current as of that date.

Eric A. Bloom, former chief executive of Sentinel Management Group Inc. in Northbrook, Ill., was sentenced on Jan. 30, 2015, to 14 years in federal prison for defrauding hundreds of victims of more than $665 million before the firm collapsed in August 2007, the U.S. Attorney's Office for the Northern District of Illinois announced [1]. Former head trader Charles K. Mosley was sentenced to eight years. Prosecutors called it the largest financial fraud case ever prosecuted in federal court in Chicago.

Appeal outcome: The Seventh Circuit affirmed Bloom's convictions and sentence on Jan. 19, 2017 [3].

How the scheme worked

Sentinel managed short-term cash for futures commission merchants, commodity pools, hedge funds and others. According to trial evidence as described by prosecutors [1] [2]:

1. Client securities pledged: From January 2003 to August 2007, Bloom used securities belonging to clients in Sentinel's "125 Portfolio" and "Prime Portfolio" as collateral for a Bank of New York Mellon loan and for "repo" borrowing.
2. A hidden house portfolio: The borrowed money funded an undisclosed, heavily leveraged "House Portfolio" concentrated in high-risk, illiquid collateralized debt obligations, traded for the benefit of Sentinel officers, Bloom family members and Bloom family companies.
3. Allocated, not earned, returns: Employees pooled the results of all portfolios daily and then allocated returns as Bloom and others saw fit. Daily account statements reported these returns and listed securities without disclosing that they had been pledged.
4. The end: In July and August 2007, knowing Sentinel was nearing insolvency, Bloom took in more than $100 million more from clients. Four days before Sentinel filed for bankruptcy on Aug. 17, 2007, he blamed a "liquidity crisis" and "investor fear and panic." The bank loan balance then exceeded $415 million.

"The Financial crisis did not cause Sentinel's implosion; it merely tore away the façade of Sentinel's legitimacy," a prosecutor wrote. A CFTC official testified that the scheme put more than a dozen futures commission merchants at immediate risk of insolvency [1].

The people sentenced

U.S. District Judge Ronald Guzman ordered the defendants to pay restitution totaling $665,923,451 [1].

• Eric A. Bloom, 49, Northbrook — CEO. Convicted by a jury in March 2014 of 18 counts of wire fraud and one count of investment adviser fraud; sentenced to 14 years. Affirmed on appeal in 2017 [3].
• Charles K. Mosley, 51, Vernon Hills — head trader. Pleaded guilty in October 2013 to two counts of investment adviser fraud; sentenced to eight years.

The FBI and the Labor Department's Office of Inspector General investigated. The CFTC and the SEC filed separate civil cases.

Red flags

• A cash manager earning more than its stated conservative strategy should allow.
• Statements that don't say whether your securities have been pledged or lent out.
• Sudden blame on "market panic" when withdrawals are frozen.

What to do if you're targeted

1. Ask where your securities are held and whether they're segregated or can be rehypothecated (re-pledged by the manager).
2. Check advisers on the SEC's Investment Adviser Public Disclosure site and futures firms on the NFA's BASIC.
3. Report concerns to the SEC at sec.gov/tcr or the CFTC at cftc.gov/complaint.

Case status (as of Oct. 16, 2026)

Defendant	Court	Status as of Oct. 16, 2026	Source
Eric A. Bloom, Northbrook	N.D. Ill. (Judge Guzman); 7th Cir.	Convicted at trial March 2014; sentenced Jan. 30, 2015, to 14 years; convictions and sentence affirmed Jan. 19, 2017 (846 F.3d 243)	[1], [2], [3]
Charles K. Mosley, Vernon Hills	N.D. Ill. (Judge Guzman)	Pleaded guilty Oct. 2013; sentenced Jan. 30, 2015, to 8 years	[1]

The sentences were imposed in 2015; we have not found a source on either man's current custody status.

Sources

1. U.S. Attorney's Office, Northern District of Illinois, "CEO And Head Trader Of Bankrupt Sentinel Management Sentenced To Prison Terms For $665 Million Fraud Scheme Before Firm's 2007 Collapse," Jan. 30, 2015. https://www.justice.gov/usao-ndil/pr/ceo-and-head-trader-bankrupt-sentinel-management-sentenced-prison-terms-665-million
2. U.S. Attorney's Office, Northern District of Illinois, "CEO Of Bankrupt Sentinel Management Group Convicted In $500 Million Fraud Scheme Before Firm's 2007 Collapse," March 25, 2014. https://www.justice.gov/usao-ndil/pr/ceo-bankrupt-sentinel-management-group-convicted-500-million-fraud-scheme-firm-s-2007
3. U.S. Court of Appeals for the Seventh Circuit, United States v. Bloom, 846 F.3d 243 (7th Cir. Jan. 19, 2017). https://openjurist.org/846/f3d/243/united-states-v-bloom

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