Samuel Israel III | |
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 | |
| Born | July 20, 1959 |
| Occupation(s) | Former hedge fund manager and investment advisor |
| Criminal status | Incarcerated |
| Criminal charge | Fraud |
| Penalty | sentenced to 22 years |
Samuel Israel III (born July 20, 1959) [1] is an American fraudster and former hedge fund 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.
Born into a Jewish family, Israel attended Hackley School in Tarrytown, New York. [2] He does not have a college degree. [3]
In 1996 Israel founded the Bayou Hedge Fund Group, which raised $450 million from its investors and for which Israel was CEO. Bayou and Israel misappropriated these funds for personal use, running what would later be revealed as a Ponzi scheme. 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. [4]
In 2005, Bayou was indicted. On September 29, the Commodity Futures Trading Commission (CFTC) filed charges against Bayou, Israel, and Bayou CFO Daniel Marino. [5] The next year, the hedge fund filed for Chapter 11 bankruptcy-court protection. [6]
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. [7]
In June 2008, instead of surrendering to serve his sentence as scheduled, Israel faked his own suicide. He surrendered in July 2008, and his prison sentence was increased by 2 years as penalty for bail jumping. [8]
Israel's health is failing. He has been denied early compassionate release requests in 2014 and 2019, with the presiding judge stating that it would not promote respect for the law to go easy on white-collar criminals who have privileged backgrounds and can afford top-flight lawyers. [8]
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 was found abandoned on the Bear Mountain Bridge on June 10, 2008 with "Suicide is Painless" (the title of the theme song for both the movie and TV series M*A*S*H) 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. [9] 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. [10] The pair were featured on America's Most Wanted . [11]
Israel was eventually tracked down to a campground in Granville, Massachusetts, 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 in Butner, North Carolina. In 2019, he applied for early release, citing the First Step Act. This application was denied, and Israel's scheduled release date is May 10, 2026. [8]
A Dateline segment about him aired on September 5, 2008. [12] Israel is the subject of the "Suicide is Painless" episode of American Greed on CNBC, first broadcast on February 3, 2010. [13]
In the 2023 Netflix documentary series Madoff: The Monster of Wall Street detailing the rise and fall of Bernie Madoff, the arrest of Israel is depicted as a precursor to the public uncovering of Madoff's multibillion-dollar Ponzi scheme. [14]
Fred Wilpon is an American real estate developer and former baseball executive. He was principal owner of the New York Mets from 1987 to 2020.
The Bayou Hedge Fund Group (1996-2006) was a group of companies and hedge funds founded and headed by Samuel Israel III. Approximately $450m was raised by the group from investors, who were defrauded from nearly the start with funds being misappropriated for personal use.
The Federal Correctional Complex, 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 is about 25 miles (40 km) northwest of Raleigh, the state capital. It includes the Bureau's largest medical complex, which operates a drug treatment program and specializes in oncology and behavioral science. Among its inmates was Bernie Madoff, who was convicted for perpetrating the largest Ponzi scheme in history. He died at the prison in April 2021.
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The Madoff investment scandal was a major case of stock and securities fraud discovered in late 2008. In December of that year, Bernie Madoff, the former Nasdaq chairman and founder of the Wall Street firm Bernard L. Madoff Investment Securities LLC, admitted that the wealth management arm of his business was an elaborate multi-billion-dollar Ponzi scheme.
Participants in the Madoff investment scandal included employees of Bernard Madoff's investment firm with specific knowledge of the Ponzi scheme, a three-person accounting firm that assembled his reports, and a network of feeder funds that invested their clients' money with Madoff while collecting significant fees. Madoff avoided most direct financial scrutiny by accepting investments only through these feeder funds, while obtaining false auditing statements for his firm. The liquidation trustee of Madoff's firm has implicated managers of the feeder funds for ignoring signs of Madoff's deception.
The recovery of funds from the Madoff investment scandal has been underway since the scandal broke in December 2008. That month, recovery trustee Irving Picard received funds from the Bank of New York account where Bernard Madoff held new investments into his Ponzi scheme. As it has been concluded that no legitimate investments were made on the investors' behalf for at least the last 12 years of operation, recovery has proceeded on a "money in/money out" basis. Investors are entitled to receive no more than the nominal cash amounts that they paid in and did not subsequently withdraw, without regard to inflation, interest, opportunity cost or the false statements that Madoff provided them. Those statements combined to a total balance of approximately $64 billion, while the admitted claims amount to $19.5 billion. As of March 2023, the trustee had recovered $14.6 billion toward these claims through legal action against Madoff associates, feeder funds and beneficiaries of the scheme, and had made fourteen distributions to investors. Action by the Department of Justice has recovered an additional $4 billion.
Octopus: Sam Israel, the Secret Market, and Wall Street's Wildest Con is a 2012 non-fiction book by the Canadian author and journalist Guy Lawson. The book was published by Crown Publishing on July 10, 2012.
Access International Advisors and Marketers, a Securities and Exchange Commission-registered investment advisor and a hedge fund of funds, was a research analyst investment agency that specialized in managing hedged and structured investment portfolios that involve commercial physical and biological research. It was a feeder fund into the securities firm of Bernie Madoff, as part of the Madoff investment scandal.
Shana Diane Madoff, sometimes referred to as Shana Madoff Skoller Swanson, is an American former attorney who is now a yoga teacher.
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But Sam the 3rd had never actually graduated from college.
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