Samuel Israel III

"Suicide is Painless" Convicted Hedge Fund Manager Pleads Guilty

Kate Klonick | August 6, 2008, 11:23AM

Samuel Israel III, the convicted hedge-fund manager who faked suicide and went on the lam to avoid going to prison, will plead guilty today in U.S. District Court.

From Reuters:

Israel, bearded and dressed in a baggy brown tee-shirt and light pants, appeared before U.S. Magistrate Judge Lisa Margaret Smith in White Plains, a suburb of New York City. He agreed to waive an indictment on a charge of failure to surrender for service of a prison sentence.

The magistrate judge told Israel: "I understand that you have decided to enter a plea of guilty." Israel told the judge he did want to plead guilty, but Smith said the formal plea would have to be entered before the district judge.

Samuel Israel III

"Suicide Is Painless" Fugitive Turns Himself In

Kate Klonick | July 2, 2008, 10:52AM

Samuel Israel III, the convicted hedge fund manager who faked his own suicide just days before he was to be sent to prison, turned himself into police in Southwick, Massachusetts today.

From the AP:

Federal officials say fugitive hedge-fund swindler Samuel Israel has surrendered to authorities.

Rebekah Carmichael, a spokeswoman for U.S. Attorney Michael Garcia, said Wednesday that Israel is in federal custody. She would not immediately provide other details.

Israel disappeared last month on the day he was supposed to report to federal prison. Authorities found his car on a bridge over the Hudson River with the words "suicide is painless" scrawled in the dust on the hood.

He was sentenced to 20 years in prison for bilking investors out of $450 million in hedge funds.

Samuel Israel III

Suicide Really Is Painless for Convicted Hedge Fund Manager

Kate Klonick | June 16, 2008, 5:11PM

Last week, we wrote about Samuel Israel III, the former hedge fund manager sentenced to a 20-year prison sentence for fleecing his clients out of $400 million.

At first, authorities thought Israel may have committed suicide when he disappeared on June 10, just days before the start of his prison term. They found his car near Bear Mountain Bridge with the words, "suicide is painless" scrawled in the dust on the hood.

But the enigmatic quip, the title of the theme song from the hit TV series M*A*S*H, was just part of a ruse to avoid incarceration, though authorities did not state why they had ruled out suicide.

From the AP:

U.S. Marshal Joseph Guccione said Monday that investigators now consider the case of Samuel Israel III to be solely a fugitive investigation.

. . . Federal marshals issued a wanted poster Thursday for the man convicted of cheating investors out of $450 million in his Bayou hedge funds. They said he should be considered armed and dangerous.

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Kate Klonick | June 11, 2008, 9:45AM

A convicted hedge fund manager, set to start his 20-year prison term next week, disappeared into the night, in what investigators suspect is a faked suicide.

The Wall Street Journal reports this morning that Samuel Israel III, the former chief of Bayou Management LLC, disappeared on Tuesday. His car was found near Bear Mountain Bridge over Hudson River, with an enigmatic message written in dust on his car: "suicide is painless."

Despite the ominous note, no body has been recovered and no witnesses saw anyone jump from the bridge:

[Bruce] Cuccia, [a New York state police investigator] said that, since 1980, more than 40 people have jumped to their deaths from the bridge, which marks one of the deepest points of the Hudson River. He said it would be impossible to survive the 150-foot fall.

The bodies of almost all jumpers are found quickly, Mr. Cuccia said. "I will be satisfied in a few days that if the body doesn't come up, he didn't jump," he said.

U.S. Marshalls have taken over the case and launched an international manhunt, a sign that Israel is indeed the latest white-collar criminal to go on the run:

Police in 2006 found one fugitive money manager, Kirk Wright, 37, living in Miami Beach. He had disappeared after his hedge fund collapsed, costing investors $150 million. A federal jury recently found him guilty of defrauding thousands of investors in International Management Associates, including many professional football players.

Mr. Wright had claimed the fund was performing well, when it was actually losing money, and he was spending client's money on jewelry, real estate, cars and a wedding. Over Memorial Day weekend, shortly after being brought to an Atlanta jail, he hanged himself.

In another instance, in January 2006, shortly before being sentenced for stealing at least $27 million from investors, hedge-fund manager Angelo Haligiannis had double-parked his Jeep Cherokee in Manhattan, cut off his ankle monitor and fled. Last fall the 35-year-old was arrested in a luxurious resort on the Greek island of Crete, vacationing with his wife and daughter.

Also last year, Michael Berger, who defrauded clients of his Manhattan Investment Fund, was arrested by Austrian police, driving toward Salzburg five years after he had originally disappeared. Betting that technology and Internet stocks would fall in the late 1990s, Mr. Berger lost roughly $400 million when his hedge fund collapsed in 2000.

If Israel did not in fact jump from the bridge, this will be the second faked suicide attempt for Bayou. Early in the federal investigation, a note was found in the empty offices of the company by a beleaguered investor. The note, penned by Daniel Marino the firm's chief financial officer, began: "This is my suicide note and confession." Marino never attempted suicide.

Police have recently recovered $100 million of the $400 million lost by investors through Bayou. Both Israel and Marino were convicted on fraud charges in 2005 and sentenced to 20 years in prison.