Samuel Israel III spent years fooling people, so it’s no surprise that police, as well as former associates and investors, are having trouble believing the convicted hedge fund manager committed suicide Monday.
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A law enforcement source told The Wall Street Journal that investigators are “now even more skeptical” that Israel jumped off the Bear Mountain Bridge on the day he was to report to prison in Massachusetts and being serving a 20-year sentence.
Israel’s SUV was found on the bridge, which is 40 miles north of New York City, early Monday afternoon.
The phrase “suicide is painless,” the theme song of the television show and movie “M*A*S*H,” was written in dust on the hood. Police also found a note from Israel inside the car.
However, no body has been found in the Hudson River, and police have questioned the driver of a car that was seen parked next to Israel’s.
U.S. marshals have issued a warrant for Israel’s arrest that says he should be considered “armed and dangerous.”
Israel, 48, had left his Armonk, N.Y., home Monday morning, telling his girlfriend, Debbie Ryan, that he was driving himself to a federal prison in Ayer, Mass.
U.S. District Court Judge Colleen McMahon had sentenced Israel in April after he pleaded guilty for his part in a $400 million fraud committed by the company he founded, Bayou Management LLC, and the hedge funds it operated.
In addition to sentencing him to 20 years, McMahon ordered Israel to repay $300 million to his clients.
Two of Israel’s associates at Bayou also entered guilty pleas.
Daniel Marino, the company’s chief financial officer, received a 20-year-sentence.
James G. Marquez, a former associate of billionaire investors George Soros and Michael H. Steinhardt, who co-founded some of Bayou’s hedge funds, was sentenced to four years and four months in prison.
Israel grew up in New Orleans, where his grandfather, Sam Israel Jr., and father, Lawrence Israel, ran the commodities trading firm, Leon Israel & Bros. In 1981 they sold the company to Donaldson Lufkin & Jenrette Inc. for $44 million.
After attending, but not graduating from Tulane University, Samuel Israel III bounced about on Wall Street, working as a trader with several firms.
In 1996, he founded Bayou Management, which was headquartered in Stamford, Conn. He asked Marino and Marquez, whom he had met in connection with earlier jobs, to join him there.
Despite its poor performance, the company reported substantial profits, Israel and Marino masking their problems by creating a fake accounting firm to produce fake audits.
As things got worse, Marino and Israel, who rented Donald Trump’s house in Mount Kisco, N.Y., for $32,000 a month, seemed to live better and better, having collected huge fees on their false profits.
The house of cards that was Bayou finally fell down in August 2005 when a firm tried to withdraw $55 million from the fund.
Even though the money wasn’t there, Israel told Marino to write a check for the amount. Marion wrote the check as well as an account of the fraud and a suicide note.
Marino didn’t make good on the suicide threat, but his description of the fraud was discovered and federal authorities filed charges.
Israel pleaded guilty to fraud and money laundering charges in September 2005.
“I can’t put into words how sorry I am,” he said at his sentencing in April.
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3 Comments
#1. Herb 06.14.2008
Me thinks he is still alive and headed for some island that doesn’t have an extradition treaty…
#2. dave 06.14.2008
business card on ebay… haha
#3. el Pedro 06.15.2008
These are small-scale considering that Cheney-Halliburton-Bush-Carsyle Group have done to us. We’ll recover from this, but not from a 15 trillion dollar debt. I wonder what type of rice rations we’ll get in Chinese slave-labor prison camps on our ‘homeland’ once we can’t afford a defense. Or half of one.
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