Mom brokered hedge fund fugitives surrender

Date: Monday, July 7, 2008
Author: Investmentnews.com

Samuel Israel III surrendered to police Thursday morning, nearly a month after he faked his suicide to avoid a 20-year jail term.

Peter Coe, a dispatcher with the Southwick police, confirmed the arrest of the former Bayou Group executive, according to a Reuters report.

Mr. Israel's mother had told U.S. marshals that he would give himself up, according to Reuters.

She had been in touch with Mr. Israel for weeks and had urged him to turn himself in, officials told Reuters.

He disappeared June 9, when his 2006 GMC Envoy sport utility vehicle was found abandoned near the Bear Mountain Bridge in Orange County, New York, with the phrase "suicide is painless" written in the dust on the hood.

Mr. Israel was to have reported to federal prison in Ayer, Mass., that morning.

Authorities, quickly convinced that there was no suicide, issued a bench warrant for his arrest that day.

Mr. Israel's girlfriend was arrested 10 days later and was charged with aiding and abetting his escape, according to the Associated Press.

Mr. Israel, a founder of Bayou Management LLC, pleaded guilty in September 2005 to charges of conspiracy and fraud in connection with a scheme to cheat investors in the Stamford, Conn., hedge fund out of $450 million.

He was sentenced in April to 20 years in prison and ordered to pay his victims $300 million.

A spokeswoman for U.S. Attorney Michael Garcia of the Southern District in New York declined to comment on Mr. Israel's surrender.