Ex-Sentinel CEO Says Virus Risk Merits Cutting 14-Year Term

By Reenat Sinay
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Law360 (June 18, 2020, 4:08 PM EDT) -- Former Sentinel Management Group Inc. CEO and convicted fraudster Eric Bloom urged an Illinois federal court to grant him early release over COVID-19 concerns, saying his heart condition puts him at increased risk and that his prison recently backtracked on a promise of home confinement.

Bloom, now 55, has been serving a 14-year sentence in a Florida federal prison after being found guilty of 18 wire fraud counts and one count of investment adviser fraud over a scheme that bankrupted the Northbrook, Illinois-based investment firm and bilked investors out of $665 million. He is currently set to be released in May 2027.

In his bid for compassionate release Tuesday, Bloom said he was told by a prison official that he was on a list to be released to home confinement and a probation officer conducted an inspection of his wife's home, but the official later walked back that representation with no explanation.

Bloom also detailed a supposed yearslong lack of medical care for his pre-incarceration diagnosis of right bundle branch block, or RBBB, a form of chronic cardiac arrhythmia that he said the Centers for Disease Control and Prevention lists as an enhanced risk factor for coronavirus.

In the five years he has been at low-security prison FCI Miami and its minimum-security satellite camp, the Bureau of Prisons has ignored most of his numerous requests for medical attention, he said.

Bloom said he was eventually given an EKG and echocardiogram last year, but doctors never discussed the results of the tests with him or ordered any treatment. He has also suffered spells of dizziness and fainting since last year that he believes to be a sign that his RBBB is worsening, he added.

"If BOP could not adequately treat Mr. Bloom before the COVID-19 pandemic, how will it be able to do so once the virus strikes the FCI Miami prison camp?," he said.

Bloom said the BOP is "powerless to stop the contagion" and that its lax coronavirus testing of inmates and staff around the country suggests that the numbers of confirmed cases are skewed. Rather than having avoided COVID-19 thus far, FCI Miami simply does not know whether or not inmates and staff have contracted the virus, he said.

Although Bloom said there were no confirmed cases at FCI Miami as of Tuesday's filing, the facility had two staff cases of coronavirus as of Thursday afternoon, according to the BOP website.

"Apart from the questionable numbers, BOP fails to consistently follow its own policies," he said. "Staff who should be quarantined after exposure are not. Prisons are failing to stock basic essentials like soap. The situation is so poor that a union representing 30,000 BOP employees has filed an OSHA complaint because 'staff who were screened and ordered home' ... were 'ordered back to work within 48 hours.'"

According to Bloom, he has exhausted administrative remedies within the BOP because his compassionate release request has gone unanswered by his warden for more than 30 days.

Citing his pristine prison disciplinary record and his transfer from the low-security main facility to its minimum-security satellite, Bloom said he presents no danger to the community if awarded early release or home confinement.

Prosecutors have said the ex-CEO and Sentinel's former head trader Charles Mosley used customers' securities as collateral for a massive bank loan that was partly used to purchase millions of dollars worth of high-risk securities for a portfolio benefiting Sentinel insiders and their families.

A jury found that the pair also misled customers — futures commission merchants, hedge funds and wealthy individuals — about the firm's risky trading strategy for years, as well as its shaky financial condition in the days leading up its August 2007 bankruptcy filing.

Mosley, who pled guilty in the case and cooperated with prosecutors against his former boss, was sentenced in 2015 to eight years in prison for his role in the scheme.

Representatives for the parties did not immediately respond to requests for comment Thursday.

Bloom is represented by Patrick W. Blegen of Blegen & Garvey.

The government is represented by Kristen Totten, Scott D. Heffron and Joseph A. Stewart of the U.S. Attorney's Office for the Northern District of Illinois.

The case is U.S. v. Bloom et al., case number 1:12-cr-00409, in the U.S. District Court for the Northern District of Illinois.

--Editing by Stephen Berg.

For a reprint of this article, please contact reprints@law360.com.

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