So is this an html block? Or a PHP block or what? You cannot use template code in a block - it is for templates only. If you want block code to not show to a usergroup, you would need to use a PHP block and use PHP code like:
PHP Code:
if (is_member_of(vB::$vbulletin->userinfo, 1)) {
$my_output = "html code here";
} else {
$my_output = "other html code here";
}
return $my_output;