Samuel Israel III
|Samuel Israel III|
July 20, 1959 |
New Orleans, Louisiana, United States
|Occupation||Former hedge fund manager and investment advisor|
|Criminal penalty||sentenced to 22 years|
In 1996, Israel founded the Bayou Hedge Fund Group, which raised $450 million from its investors and for which Israel was CEO. Bayou and Israel misappropriated these funds for personal use, running what would later become known as an infamous Ponzi Scheme. After poor returns in 1998, the firm founded a dummy accounting firm, which they hired to audit themselves in order to keep up appearances to investors.
In 2005, Bayou was indicted for one of the largest hedge fund frauds in American history. On September 29, the Commodity Futures Trading Commission (CFTC) filed charges against Bayou, Israel, and Bayou CFO Daniel Marino. The next year, the hedge fund filed for Chapter 11 bankruptcy-court protection.
On April 14, 2008, Israel was sentenced to 20 years in prison for and ordered to forfeit $300 million after pleading guilty to defrauding investors in his now-bankrupt firm.
Manhunt and arrest
His 2006 GMC Envoy was found abandoned on the Bear Mountain Bridge on June 10, 2008 with the following written in dust on the hood, "Suicide is Painless," the title of the theme song from the M*A*S*H TV series. Police suspected that this was an attempt by Israel to fake his own death in order to avoid prison. Israel's girlfriend, Debra Ryan, was arrested for aiding and abetting his escape later in June 2008, and was released on bail. According to police, Ryan admitted that she and Israel parked an RV loaded with Israel's belongings near Bear Mountain Bridge on the day before his disappearance. The pair have been featured on America's Most Wanted.
Sentenced in April 2008 to 20 years in federal prison, Israel had failed to report to prison June 9, 2008. Under intense questioning, his girlfriend, Deb Ryan, admitted to helping him escape. He was eventually tracked down to a campground in Granville, Massachusetts, and surrendered to authorities on July 2, 2008. As a consequence, he was further sentenced on July 15, 2009, to an additional two years in prison while his girlfriend was sentenced to 3 years probation. He is serving his sentence at Federal Correctional Institution, Butner Low in Butner, North Carolina; his earliest possible release date is September 12, 2027.
He is the subject of an episode of American Greed (#25) on CNBC, which was first broadcast February 3, 2010.
- The Search for a Missing Trader Goes Global, The New York Times, 14 June 2008.
- Cantrell, Amanda (September 29, 2005). CNN/Money http://money.cnn.com/2005/09/29/markets/bayou/index.htm. Missing or empty
- "CFTC Press Release 5-21-05". Commodity Futures Trading Commission.
- Brickley, Peg. "Bayou Investors Who Got Out Early Lose Their Bid for Pretrial Victory". Wall Street Journal.
- "Bayous Israel Gets 20-Year Term for Hedge Fund Fraud". Bloomberg.
- Suicide note left on swindler's car on bridge, New York Post, 10 June 2008.
- Fugitive Fund Manager’s Girlfriend Is Charged, The New York Times, 20 June 2008.
- Samuel Israel - Fugitive, America's Most Wanted
- Hedge-fund swindler Israel surrenders, Reuters
- The U.S. Government Is a Sham. The Federal Reserve Is Running a Secret Bond Market. Global Finance Is Controlled by an “Upperworld” of Rogue Black-Ops Fixers New York, July 1, 2012
- The Search for a Missing Trader Goes Global, The New York Times, 14 June 2008
- Israel's FBI wanted poster
- Israel's U.S. Marshals wanted poster
- Fugitive hedge-fund swindler in federal custody, Reuters, 2 July 2008
- Hedge-Fund Fugitive in Custody, Time, 2 July 2008
- Fund Manager Who Faked His Suicide Surrenders, The New York Times, 3 July 2008