A former trader from Vernon Hills who was charged in one of the largest financial fraud cases prosecuted in Chicago has entered a guilty plea as part of a deal with prosecutors, court documents show.
Charles Mosley entered a plea in federal court Tuesday.
The deal will cap his sentence at 10 years behind bars, according to a report in the Chicago Sun-Times. He had faced up to 370 years in prison if he was convicted in the $500 million fraud scheme.
Prosecutors accuse the 49-year-old man of defrauding more than 70 customers before the firm collapsed in 2007. He was charged along with and Eric Bloom, the former CEO of Sentinel Management Group.
Authorities say the pair misappropriated customers' securities by using them as collateral for a loan received from the Bank of New York Mellon Corp., according to the U.S. Attorney's Office in Chicago.
The indictment says part of the bank loan was used to purchase millions of dollars of high-risk, illiquid securities -- not for customers, but for a trading portfolio that benefited Mosley, Bloom, some of Bloom's relatives and corporations controlled by his family.
"Yes, I did that," Mosley said during his court appearance, admitting he told investors that their money was safe even though the Northbrook company had financial problems.
Sentinel had boasted that no client had ever lost money in its fund, which was available to corporations, institutional investors and wealthy individuals.
Mosley will cooperate with prosecutors in their case against Bloom, who's set to stand trial in the spring.
Bloom's lawyers deny the allegations and say the company's collapse a result of the global financial crisis, not financial misconduct.
Mosley will be sentenced after Bloom's trial.