‘Whiz Kid,’ 23, Pleads Guilty to Securities Scam

Wall Street “whiz kid” David Bloom pleaded guilty to mail and securities fraud this morning for allegedly bilking investors out of $10 million which the 23-year-old sunk into artwork, cars and two fully furnished homes for himself.

“I said I was a money manager, but I did not invest their money as I told them I would,” the baby-faced 1986 Duke University graduate told U.S. District Judge David Edelstein.

Among the investors taken in by Bloom’s scheme were the Rockefeller family, the Sultan of Brunei and Bill Cosby.

Bloom, who was profiled in a New York Times Magazine feature on new art collectors, faces five years in prison and a maximum fine of double the amount lost by investors at his May 12 sentencing. No sentencing agreement accompanied his guilty plea.

Polite Answers on Scam

Wearing a dark gray suit, white shirt and blue tie, Bloom stood with his hands behind his back and politely answered Edelstein’s questions about the scam during a 25-minute hearing.

Asked if he realized his “money management” operation was illegal, Bloom responded, “Yes, your honor.”

According to court papers, Bloom--who was not licensed as an investment adviser--used his clients’ funds to buy $5.5 million in artwork; a $1.9-million East Hampton beach house; an $830,000 Manhattan apartment; $800,000 in furnishings for the two homes, and two cars worth $200,000.

The defendant also bought “numerous items of expensive jewelry and deluxe trips to the Caribbean” for himself, family and friends, federal prosecutors charged.

All the artwork will be auctioned at Sotheby’s near the end of May, with the chance that some investors could still make a profit, said Bloom’s attorney, Peter Morrison.

Bloom was arrested Jan. 14 on a federal complaint. He had 130 clients at his Greater Sutton Investors at the time of his arrest.