David P. Bloom

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David Peter Bloom
David P. Bloom.jpg
David P. Bloom outside court in New York, December 1988
Other namesDavid Daly
Criminal statusHeld in prison
Conviction(s) December 1988, 2000
Criminal charge Mail fraud, securities fraud, grand larceny, grand theft and scheming to defraud
Penalty8 years in prison in 1988, forfeiture of US$13 million, lifetime ban from securities industry, 5 years in prison in 2000

David Peter Bloom is a twice convicted American fraudster who defrauded investors of almost $15 million in the 1980s. [1] [2]

Contents

Early life

Bloom grew up on the Upper East Side of Manhattan and attended Trinity School [2] where he graduated in 1982. [3] After graduating from Duke University, [4] Bloom returned to New York to start an investment company under the name of Greater Sutton Investors Group Inc. [5] [6]

Criminal inquiries and conviction in 1988

In 1988, the U.S. Securities and Exchange Commission (SEC) accused Bloom of using his unregistered investment business to collect over $10 million between 1985 and 1988 from over 140 clients for his personal gain. [5] [7] Instead of making investments on behalf of his clients, Bloom was accused of acquiring art, real estate and other personal assets with his clients funds. [8] [9]

Notable investors in Bloom's scheme included the Sultan of Brunei, Bill Cosby, and the Rockefeller family. [10]

Bloom settled with the SEC without admitting guilt [11] and agreed to hand over all his assets to a court-appointed receiver. He also was barred for life from the securities industry, including association with any broker, dealer, investment adviser, investment company, or municipal securities dealer. [12]

Two days after his settlement with the SEC, Bloom was charged by federal prosecutors in Manhattan for violations of the registration and antifraud provisions of the Investment Advisers Act of 1940. [4] Bloom pleaded guilty, waiving indictment, to one count each of mail and securities fraud. [13] He was sentenced to eight years in prison for defrauding investors of almost $15 million. [14] Bloom served 5 years out of his 8-year sentence, at the Federal Correctional Complex, Allenwood, in Pennsylvania. [15]

Due to Bloom's young age at the time of his criminal activity, the press referred to him as a whiz kid; most often the "Wall Street Whiz Kid". [16] [13] [14]

Bloom's parents were later sued for $191,250 that Bloom spent on them, [16] and they settled for $30,000. [17]

Criminal inquiries and conviction in 2000

In 2000, federal prosecutors in Manhattan accused Bloom of grand larceny and scheming to defraud at least 10 workers at a Manhattan restaurant out of between $50,000 and $200,000. [18] Bloom claimed to own a money management company and offered to invest his victim's money in the stock market and gift I.P.O.'s. [19] However, Bloom spent the funds on himself.

He was arrested in June 2000, did not post the $75,000 bail set and instead was incarcerated in the Vernon C. Bain Correctional Center, part of Rikers Island.

He pleaded guilty to the charges of grand larceny and scheming to defraud and was released in 2006 on parole. [20]

Criminal inquiries in 2022, 2023

On 9 August 2022, Bloom was arrested on suspicion of 12 counts of grand theft in Los Angeles and he posted $45,000 bail. [20]

On 28 August 2023, Bloom was arrested again and this time was charged with 18 felony counts: 9 for securities fraud and 9 for grand theft. The district attorney George Gascón called Bloom a predator, and accused him of committing crimes between 2021 and 2023, [21] stealing nearly $250,000 from nine alleged victims. [22] He was being held on $505,000 bail in Los Angeles [23] which was lowered to $100,000 at his arraignment. Under the current charges, he faces up to 14 years in prison. [24]

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References

  1. ↑ "Consultant, 23, Faces Charge of Mail Fraud : Unregistered Adviser Could Get 5-Year Term". Los Angeles Times . January 15, 1988.
  2. 1 2 "New Yorkers & Co.; Young Name Dropper Wins Riches, and a Date in Court". The New York Times . January 18, 1988.
  3. ↑ "The story behind the Kid's con". New York Daily News . January 24, 1988.
  4. 1 2 "The Whiz Kid Who Wasn't". Time . January 25, 1988.
  5. 1 2 "Lush Life: Investor, 23, Named in Huge Fraud". The New York Times. January 13, 1988.
  6. ↑ Blum, David (February 22, 1988). "Rich Kid, Poor Kid". New York . New York. p. 48.
  7. ↑ "Investor, 23, Charged in $10 Million Fraud". The New York Times. January 15, 1988.
  8. ↑ "Ersatz whiz kid to sell assets to settle SEC case". UPI . January 13, 1988.
  9. ↑ "SEC Charges 23-year-old investor with diverting $8 million of client's funds". The Journal News Metro. January 13, 1988.
  10. ↑ "'Whiz Kid,' 23, Pleads Guilty to Securities Scam". Los Angeles Times. Associated Press. March 31, 1988.
  11. ↑ "SEC Claims Artful Swindle". The Washington Post . January 13, 1988.
  12. ↑ U.S. Securities and Exchange Commission Annual Report 1988 (PDF). New York: U.S. Securities and Exchange Commission. December 4, 1988. p. 28.
  13. 1 2 "'Wall St. Whiz Kid' Given Stiff 8-Year Prison Term". Los Angeles Times. December 10, 1988.
  14. 1 2 "Wall St. 'Whiz Kid' Gets 8-Year Term for Fraud". The New York Times. December 10, 1988.
  15. ↑ "Court Upholds Term for Fraud". The New York Times. Associated Press. August 27, 1991.
  16. 1 2 "Parents of Wall Street Whiz Kid Sued for Money He Spent on Them". AP News . December 18, 1988.
  17. ↑ "Investors in scam to get 44% return". The News & Observer . August 18, 1989.
  18. ↑ "Convicted Con Artist Accused in New Scam". Orlando Sentinel . July 14, 2000. Archived from the original on July 21, 2021.
  19. ↑ "High-Class Grifter David Bloom Gets Pinched … Again". Observer. July 31, 2000.
  20. 1 2 "How a twice-convicted con artist went from scamming Manhattan elites to L.A. dive bars". Los Angeles Times . September 28, 2022.
  21. ↑ "'Wall Street Whiz Kid' charged with defrauding victims out of nearly $250K in L.A. County". KTLA . August 29, 2023.
  22. ↑ "'Wall Street Whiz Kid' David Bloom charged with running financial scams in LA County". FOX . August 29, 2023.
  23. ↑ "'Wall Street Whiz Kid' charged with running financial scams out of L.A. bars and luxury apartments". Los Angeles Times . August 28, 2023.
  24. ↑ "Convicted NY serial scammer accused of targeting victims in Los Angeles". ABC7 . August 29, 2023.
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