Samuel Israel III (born July 20, 1959) is an American fraudster and former
hedge fund
A hedge fund is a pooled investment fund that trades in relatively liquid assets and is able to make extensive use of more complex trading, portfolio-construction, and risk management techniques in an attempt to improve performance, such as sho ...
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
Born into a Jewish family, Israel attended
Hackley School
Hackley School is a private college preparatory school located in Tarrytown, New York, and is a member of the Ivy Preparatory School League. Founded in 1899 by a wealthy philanthropist, Frances Hackley, Hackley was intended to be a Unitarian a ...
in
Tarrytown, New York
Tarrytown is a village in the town of Greenburgh in Westchester County, New York. It is located on the eastern bank of the Hudson River, approximately north of Midtown Manhattan in New York City, and is served by a stop on the Metro-North ...
. He 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 central executive officer (CEO), chief administrator officer (CAO) or just chief executive (CE), is one of a number of corporate executives charged with the management of an organization especially ...
. 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 profits to earlier investors with funds from more recent investors. Named after Italian businessman Charles Ponzi, the scheme leads victims to believe that profits are comin ...
. 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 2005, Bayou was indicted. On September 29, the
Commodity Futures Trading Commission
The Commodity Futures Trading Commission (CFTC) is an independent agency of the US government created in 1974 that regulates the U.S. derivatives markets, which includes futures, swaps, and certain kinds of options.
The Commodity Exchange Ac ...
(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, wheth ...
bankruptcy-court protection.
On April 14, 2008, Israel was sentenced to 20 years in prison and ordered to forfeit $300 million after pleading guilty to defrauding investors in his bankrupt firm.
Manhunt and arrest
Sentenced in April 2008 to 20 years in federal prison, Israel failed to report to prison as ordered on June 9, 2008. His 2006
GMC Envoy
The GMC Envoy is a mid-size SUV, manufactured and marketed by General Motors for model years 1998-2009 over two generations. Adopting a nameplate used by GM Canada, the Envoy was a rebadged variant of the Chevrolet TrailBlazer, Oldsmobile Brava ...
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 US 6 and US 202 across the Hudson River between Bear Mountain State Park in Orange Co ...
on June 10, 2008 with "
Suicide is Painless
"Suicide Is Painless" (or "Song from M*A*S*H") is a song written by Johnny Mandel (music) and Michael Altman (lyrics) for the 1970 film ''M*A*S*H''. In addition to being performed by characters in the film, it plays during the title sequence as ...
" (the title of the
theme song
Theme music is a musical composition that 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 so ...
for both the
movie
A film also called a movie, motion picture, moving picture, picture, photoplay or (slang) flick is a work of visual art that simulates experiences and otherwise communicates ideas, stories, perceptions, feelings, beauty, or atmosphere ...
and
TV series
A television show – or simply TV show – is any content produced for viewing on a television set which can be broadcast via over-the-air, satellite, or cable, excluding breaking news, advertisements, or trailers that are typically placed betw ...
''
M*A*S*H
''M*A*S*H'' (Mobile Army Surgical Hospital) is an American media franchise consisting of a series of novels, a film, several television series, plays, and other properties, and based on the semi-autobiographical fiction of Richard Hooker.
The ...
)'' written in the dust on the hood. Police suspected that this was an attempt by Israel to fake his own death in order to avoid
prison
A prison, also known as a jail, gaol (dated, standard English, Australian, and historically in Canada), penitentiary (American English and Canadian English), detention center (or detention centre outside the US), correction center, correc ...
. Israel's girlfriend, Debra Ryan, was arrested later that same month for aiding and abetting his escape, and was released on bail. Under intense questioning, Ryan admitted to helping him escape, and that she and Israel parked an
RV loaded with Israel's belongings near Bear Mountain Bridge on the day before his disappearance. The pair were featured on ''
America's Most Wanted
''America's Most Wanted'' (often abbreviated as ''AMW'') is an American television program whose first run was produced by 20th Television, and second run is under the Fox Alternative Entertainment division of Fox Corporation. At the time of i ...
''.
Israel was eventually tracked down to a campground in
Granville, Massachusetts
Granville is a town in Hampden County, Massachusetts
Massachusetts (Massachusett language, Massachusett: ''Muhsachuweesut assachusett writing systems, məhswatʃəwiːsət'' English: , ), officially the Commonwealth of Massachusetts, is th ...
, and surrendered to authorities on July 2, 2008. 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
The Federal Correctional Complex, Butner (FCC Butner) is a United States federal prison complex for men near Butner, North Carolina. It is operated by the Federal Bureau of Prisons, a division of the United States Department of Justice. FCC Butner ...
in
Butner, North Carolina
Butner is a town in Granville County, North Carolina, United States. The population was 8,397 as of the 2020 census. Butner was managed by the state of North Carolina from 1947 through 2007.
History
A bill passed by the North Carolina General ...
. 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 Congress and signed by President Donald Trump in Decembe ...
. This application was denied, and Israel's scheduled release date is May 10, 2026.
A
''Dateline'' segment about him aired on September 5, 2008. Israel is the subject of the "Suicide is Painless" episode of ''
American Greed
''American Greed'' (also known as ''American Greed: Scams, Scoundrels and Scandals'' and as ''American Greed: Scams, Schemes and Broken Dreams'') is an American documentary television series on CNBC. The series focuses on cases of Ponzi schemes, ...
'' on
CNBC
CNBC (formerly Consumer News and Business Channel) is an American basic cable business news channel. It provides business news programming on weekdays from 5:00 a.m. to 7:00 p.m., Eastern Time, while broadcasting talk sho ...
, first broadcast on February 3, 2010.
In popular culture
In the 2023
Netflix
Netflix, Inc. is an American subscription video on-demand over-the-top streaming service and production company based in Los Gatos, California. Founded in 1997 by Reed Hastings and Marc Randolph in Scotts Valley, California, it offers a fil ...
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 fraudster and financier who was the admitted mastermind of the largest Ponzi scheme in history, worth about $64.8 billion. He was at one time chairman of the NASDA ...
, the arrest of Israel is depicted as a precursor to the public uncovering of Madoff's multibillion-dollar Ponzi scheme.
See also
*
Marcus Schrenker, convicted after attempting to stage his own death
*''
Octopus: Sam Israel, the Secret Market, and Wall Street's Wildest Con'', by
Guy Lawson
Guy Lawson (born 26 January 1963) is a Canadian American journalist and true crime writer who has been published in Harper's, '' GQ'', the ''New York Times'', and ''Rolling Stone''.
Early life and career
Lawson was born in Toronto, Canada t ...
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
New York most commonly refers to:
* New York City, the most populous city in the United States, located in the state of New York
* New York (state), a state in the northeastern United States
New York may also refer to:
Film and television
* '' ...
'', July 1, 2012
The Search for a Missing Trader Goes Global ''
The New York Times
''The New York Times'' (''the Times'', ''NYT'', or the Gray Lady) is a daily newspaper based in New York City with a worldwide readership reported in 2020 to comprise a declining 840,000 paid print subscribers, and a growing 6 million paid ...
'', 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 continued sequence of existence and events that occurs in an apparently irreversible succession from the past, through the present, into the future. It is a component quantity of various measurements used to sequence events, to ...
'', 2 July 2008
Fund Manager Who Faked His Suicide Surrenders ''The New York Times'', 3 July 2008
{{DEFAULTSORT:Israel, Samuel
1996 crimes in the United States
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