Samuel Israel III (born July 20, 1959) is an American fraudster and former

hedge fund A hedge fund is a Pooling (resource management), pooled investment fund that holds Market liquidity, liquid assets and that makes use of complex trader (finance), trading and risk management techniques to aim to improve investment performance and ...

manager for the Bayou Hedge Fund Group, which he founded in 1996. In 2008, Israel was sentenced to 20 years in prison and ordered to forfeit $300 million for defrauding his investors.

Early life and education

Israel was born into a

Jewish Jews (, , ), or the Jewish people, are an ethnoreligious group and nation, originating from the Israelites of History of ancient Israel and Judah, ancient Israel and Judah. They also traditionally adhere to Judaism. Jewish ethnicity, rel ...

family of wealthy

commodities In economics, a commodity is an economic good, usually a resource, that specifically has full or substantial fungibility: that is, the market treats instances of the good as equivalent or nearly so with no regard to who produced them. Th ...

traders. He attended Hackley School in

Tarrytown, New York Tarrytown is a administrative divisions of New York#Village, village in the administrative divisions of New York#Town, town of Greenburgh, New York, Greenburgh in Westchester County, New York, Westchester County, New York (state), New York, Unit ...

. He attended

Tulane University The Tulane University of Louisiana (commonly referred to as Tulane University) is a private research university in New Orleans, Louisiana, United States. Founded as the Medical College of Louisiana in 1834 by a cohort of medical doctors, it b ...

but does not have a college degree.

Career

In 1996 Israel founded the Bayou Hedge Fund Group, which raised $450 million from its investors and for which Israel was

CEO A chief executive officer (CEO), also known as a chief executive or managing director, is the top-ranking corporate officer charged with the management of an organization, usually a company or a nonprofit organization. CEOs find roles in variou ...

. Bayou and Israel misappropriated these funds for personal use, running what would later be revealed as a

Ponzi scheme A Ponzi scheme (, ) is a form of fraud that lures investors and pays Profit (accounting), profits to earlier investors with Funding, funds from more recent investors. Named after Italians, Italian confidence artist Charles Ponzi, this type of s ...

. After poor returns in 1998, the firm founded a dummy accounting firm, which they hired to audit themselves in order to keep up appearances to investors. In an attempt to recoup investing losses, Israel became embroiled in a series of highly speculative if not outright fraudulent schemes. Guy Lawson (2012). ''Octopus: Sam Israel, the Secret Market, and Wall Street's Wildest Con''. Crown Publishing, ISBN 0307716074. He gave a $10 million loan to Robert Booth Nichols, a self-described espionage agent who gave Israel as collateral a series of supposed bonds from a vast and secretive "shadow market". These and other schemes all were unsuccessful for Israel, who was also heavily abusing cocaine and dealing with a series of painful surgeries. The scheme was exposed after a series of investors grew suspicious and demanded their funds from Bayou only to be rebuffed. On September 29, 2005 the

Commodity Futures Trading Commission The Commodity Futures Trading Commission (CFTC) is an Independent agencies of the United States government, independent agency of the US government created in 1974 that regulates the U.S. derivatives markets, which includes futures contract, fut ...

(CFTC) filed charges against Bayou, Israel, and Bayou CFO Daniel Marino. The next year, the hedge fund filed for

Chapter 11 Chapter 11 of the United States Bankruptcy Code ( Title 11 of the United States Code) permits reorganization under the bankruptcy laws of the United States. Such reorganization, known as Chapter 11 bankruptcy, is available to every business, w ...

bankruptcy-court protection.

Manhunt and arrest

Israel pled guilty and on April 14, 2008, was sentenced to 20 years in prison and ordered to forfeit $300 million to compensate victims. He was allowed to remain free until being sent to prison, due to pre-existing medical issues that needed treatment. Israel failed to report to prison as ordered on June 9, 2008. His 2006

GMC Envoy The GMC Envoy is a Mid-size car, mid-size SUV manufactured and marketed by General Motors for the 1998 to 2009 model years over two generations. Adopting a Envoy (automobile), nameplate used by GM Canada, the Envoy was phased in as a trim variant ...

was found abandoned on the

Bear Mountain Bridge The Bear Mountain Bridge, ceremonially named the Purple Heart Veterans Memorial Bridge, is a toll suspension bridge in New York State. It carries U.S. Route 6 in New York, US 6 and U.S. Route 202 in New York, US 202 across the Hudso ...

on June 10, 2008 with the phrase " Suicide is Painless" written in dust on the vehicle's hood. The phrase is the title of the

theme song Theme music is a musical composition which is often written specifically for radio programming, television shows, video games, or films and is usually played during the title sequence, opening credits, closing credits, and in some instances at ...

for both the

movie A film, also known as a movie or motion picture, is a work of visual art that simulates experiences and otherwise communicates ideas, stories, perceptions, emotions, or atmosphere through the use of moving images that are generally, sinc ...

and

TV series A television show, TV program (), or simply a TV show, is the general reference to any content produced for viewing on a television set that is broadcast via over-the-air, satellite, and cable, or distributed digitally on streaming platf ...

'' M*A*S*H''. Police suspected Israel attempted to fake his own death in order to avoid

prison A prison, also known as a jail, gaol, penitentiary, detention center, correction center, correctional facility, or remand center, is a facility where Prisoner, people are Imprisonment, imprisoned under the authority of the State (polity), state ...

. Israel and his girlfriend were featured on '' America's Most Wanted''. Israel's girlfriend, Debra Ryan, was arrested later that same month for aiding and abetting his escape, and was released on bail. Ryan admitted to helping Israel escape, and also stated she and Israel parked an RV loaded with Israel's belongings near Bear Mountain Bridge on the day before his disappearance. Israel surrendered to authorities on July 2, 2008 at the Southwick MA police station. As a consequence, he was further sentenced on July 15, 2009, to an additional two years in prison while his girlfriend was sentenced to three years' probation. Israel is serving his sentence at Federal Correctional Institution, Butner Low in Butner, North Carolina. In 2019, he applied for early release, citing the

First Step Act The First Step Act, formally known as the Formerly Incarcerated Reenter Society Transformed Safely Transitioning Every Person Act, is a bipartisan criminal justice bill passed by the 115th U.S. Congress and signed by President Donald Trump in ...

. This application was denied, and Israel's scheduled release date is May 10, 2026. Israel has cited onging chronic health problems in his bids for compassionate early release. His requests were denied in 2014 and 2019. Judge Colleen McMahon agreed in her 2019 ruling that Israel's health was poor, but she also said early release would "make a mockery of the sentencing statute" if Israel were released early, furthermore objecting to lenient sentencing for "white-collar criminals who have privileged backgrounds".

In popular culture

A ''Dateline'' segment about him aired on September 5, 2008. Israel is the subject of the "Suicide is Painless" episode of '' American Greed'' on

CNBC CNBC is an American List of business news channels, business news channel owned by the NBCUniversal News Group, a unit of Comcast's NBCUniversal. The network broadcasts live business news and analysis programming during the morning, Day ...

, first broadcast on February 3, 2010. In the 2023

Netflix Netflix is an American subscription video on-demand over-the-top streaming service. The service primarily distributes original and acquired films and television shows from various genres, and it is available internationally in multiple lang ...

documentary series '' Madoff: The Monster of Wall Street'' detailing the rise and fall of

Bernie Madoff Bernard Lawrence Madoff ( ; April 29, 1938April 14, 2021) was an American financial criminal and financier who was the admitted mastermind of the largest known Ponzi scheme in history, worth an estimated $65 billion. He was at one time ...

, the arrest of Israel is depicted as a precursor to the public uncovering of Madoff's multibillion-dollar Ponzi scheme.

References

External links

The U.S. Government Is a Sham. The Federal Reserve Is Running a Secret Bond Market. Global Finance Is Controlled by an “Upperworld” of Rogue Black-Ops Fixers
'' New York'', July 1, 2012
The Search for a Missing Trader Goes Global
''

The New York Times ''The New York Times'' (''NYT'') is an American daily newspaper based in New York City. ''The New York Times'' covers domestic, national, and international news, and publishes opinion pieces, investigative reports, and reviews. As one of ...

'', 14 June 2008
Israel's FBI wanted posterIsrael's U.S. Marshals wanted posterFugitive hedge-fund swindler in federal custody
Reuters, 2 July 2008

''

Time Time is the continuous progression of existence that occurs in an apparently irreversible process, irreversible succession from the past, through the present, and into the future. It is a component quantity of various measurements used to sequ ...

'', 2 July 2008
Fund Manager Who Faked His Suicide Surrenders
''The New York Times'', 3 July 2008 {{DEFAULTSORT:Israel, Samuel 20th-century American Jews American financial businesspeople American white-collar criminals American confidence tricksters Fugitive financiers American hedge fund managers Businesspeople from New Orleans Pyramid and Ponzi schemes 1959 births Living people People who faked their own death American people convicted of fraud American businesspeople convicted of crimes Hackley School alumni 21st-century American Jews