NEW YORK, Aug 12 (Reuters) - A former hedge fund manager and accountant whose guilty plea and subsequent cooperation helped U.S. authorities prosecute two of the biggest fraud cases in recent history was sentenced to three years in prison on Wednesday, according to the Manhattan U.S. Attorney's office.
Mark Bloom, a former partner at the accounting firm BDO Seidman and the founder of North Hills Fund, pleaded guilty in 2009 to securities fraud, mail fraud and several other charges and agreed to help prosecutors.
He was accused of misappropriating $20 million in investor funds from North Hills to fund a luxurious lifestyle, as well as participating in a massive tax shelter scheme at BDO Seidman, now known as BDO USA.
In court papers, prosecutors credited Bloom with providing key evidence about both the BDO Seidman fraud, which cost the U.S. government $1.5 billion in tax losses, and a separate $554 million fraud involving two of Bloom's former colleagues at the trading firm WG Trading Co, Stephen Walsh and Paul Greenwood.
The BDO scheme, which authorities called the largest criminal tax fraud in history, also involved the law firm Jenkens & Gilchrist and led to several convictions, including Denis Field, BDO's former chief executive, and Paul Daugerdas, a former Jenkens partner.
Field was later granted a second trial, after a juror was found to have lied during jury selection, and acquitted. Daugerdas was sentenced to 15 years in prison.
BDO USA agreed in 2012 to pay $50 million to resolve related government claims as part of a deferred prosecution agreement, while the Dallas-based Jenkens & Gilchrist folded in 2007 after agreeing to pay a $76 million penalty to the Internal Revenue Service.
Meanwhile, Bloom worked alongside Walsh and Greenwood at WG Trading, and the three men controlled the North Hills fund together, prosecutors said. Walsh and Greenwood were at one time minority owners of the New York Islanders ice hockey team.
Walsh and Greenwood were sentenced to 20 years and 10 years in prison, respectively, after pleading guilty to a 13-year fraud in which they bilked charities, university foundations and other charities of $131 million and issued $554 million in worthless promissory notes to investors to hide the misappropriation.
Bloom's defense lawyer, Mark Gombiner, had asked U.S. District Judge John Koeltl to impose no prison in light of Bloom's assistance to the government. Gombiner could not immediately be reached for comment late on Wednesday.
The case is U.S. v. Bloom, U.S. District Court for the Southern District of New York, No. 09-cr-367. (Reporting by Joseph Ax; Editing by Bernard Orr)