Hedge fund swindler’s girlfriend pleads guilty

Date: Wednesday, February 11, 2009
Author: Associated Press

The night before he was supposed to start a 20-year prison sentence, hedge fund swindler Samuel Israel III pleaded with his girlfriend to help him get away, the woman said Tuesday.

Debra Ryan, 45, of Armonk, testified in federal court as she pleaded guilty to abetting Israel’s failure to surrender last June 9.

"He woke me up and begged me to help him," Ryan told U.S. District Judge Kenneth Karas. "I agreed to help. ... I knew that was wrong."

Prosecutors said Ryan then met Israel at a highway rest stop, helped him pack his belongings and a motor scooter into an RV and drove him back to their Armonk home.

Later, Israel faked his suicide by writing "suicide is painless" in the dust on his SUV and abandoning the vehicle in the middle of a bridge over the Hudson River.

Israel, who fleeced millions of dollars from his investment clients, escaped in the RV and avoided capture for nearly a month before surrendering. He has tried to plead guilty to going on the lam, but the judge wants to make sure he is competent and has ordered mental and physical testing for him at a prison hospital in Massachusetts.

Ryan was arrested 10 days into Israel’s escape. Prosecutors said then that she had claimed she found a suicide note written by her boyfriend although she knew he had escaped.

The maximum prison term for Ryan’s crime is 10 years, but prosecutors said in a letter to the judge that federal guidelines suggest a sentence of 4 to 10 months, and Ryan agreed not to contest any sentence in that range. The guidelines are not binding on the judge.

Sentencing was scheduled for May 22 and Ryan was allowed to remain free on her $75,000 bail.

She still faces local court proceedings for allegedly trying to mail Israel $300 in cash, hidden in the pages of a magazine, while he was at the Westchester County jail. She has pleaded not guilty.

During her testimony Tuesday, Ryan referred to Israel as "my boyfriend at the time," but did not specifically say the relationship was over. Neither she nor defense lawyer Richard Strassberg would comment after the court session