Legal News

It?s Official: Feds Call Former Bayou CEO a Fugitive from the Law

By Dan Slater

Just where will Sam Israel III, the hedge-fund-CEO-turned-felon-turned-fugitive, land? Would Israel be too obvious? Might he turn up in Namibia?

One thing seems to be sure: We won’t find him floating under the Bear Mountain Bridge. According to the WSJ, the feds have ruled out the possibility that Israel, the former CEO of defunct hedge-fund firm Bayou Management, took his own life last week when his 2006 GMC Envoy was found parked atop a bridge in Westchester — about 90 minutes before Israel was to report to a federal prison in Massachusetts to serve a 20-year prison term. (Written in dust on the hood of the vehicle was “suicide is painless” — the title of the theme song for the movie and television show “M*A*S*H.”)

Rebekah Carmichael, a spokeswoman for the U.S. attorney’s office in Manhattan, said Monday that the search for Israel, 48, is now solely a fugitive investigation. The U.S. Marshals Service is reportedly leading the search, with the assistance of the FBI and other federal and state agencies.

Israel was sentenced in April after pleading guilty in September 2005 to conspiracy, investment-adviser fraud and other charges in a scheme to defraud Bayou investors out of more than $400 million. Two other former Bayou execs, including former Bayou CFO Daniel Marino, also pleaded guilty to criminal charges in the matter. Marino is serving a 20-year sentence at a federal prison in Arkansas.

LB Readers: This NY magazine article suggests several possible destinations for Israel, including Cambodia, Bahrain, São Tomé and Andorra. Anyone have any inside info, hunches, suspicions?

Full post as published by Law Blog - WSJ.com on June 17, 2008 (boomark / email).