Union-News & Sunday Republican – The girlfriend of hedge fund swindler Samuel Israel III, already accused of helping him skip out on a prison sentence, tried to send him $300 in jail, officials said Wednesday.

The cash was "secreted in the pages of a magazine" mailed to Israel last month at the Westchester County jail, county police spokesman Kieran O’Leary said. He did not know the name of the magazine.

The money was discovered during routine screening and did not reach Israel, O’Leary added. Prisoners are not permitted to receive cash.

The magazine was traced to the girlfriend, 45-year-old Debra Ryan of Armonk, and she was arrested on Friday, O’Leary said. She is due in local court later this month.

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International Herald Tribune- Samuel Israel 3rd bilked his investors out of $250 million, but they are hoping to recoup some of their money from one of Wall Street’s deepest pockets: Goldman Sachs.

Bayou’s creditors were taking aim at Goldman even before Israel, the former manager of the Bayou Group hedge fund firm, surrendered to the authorities on July 2. His faked suicide on a Hudson River bridge 40 miles north of Manhattan and subsequent disappearance on the day he was to start a prison term had set off an international manhunt.

Bayou’s unsecured creditors committee sued Goldman in late May, claiming the investment bank had failed to detect Israel’s fraud, one of the biggest ever in the hedge fund industry, and to investigate signs that something was amiss at Bayou.

For six years, Goldman acted as the so-called prime broker for Bayou, clearing trades, taking custody of securities and providing reports on the fund firm’s investments. The claim seeks $20 million.

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New York (HedgeCo.Net) – Chances are, when you stage a suicide to avoid a 20-year prison sentence and spark an international manhunt, you’re probably not going to have the luxury of being granted bail. 

That’s exactly what happened when Judge Colleen McMahon denied Samuel Israel III in a federal court in Manhattan last week.

Not only will Israel have to serve his original term, he will probably have to serve additional time for failing to report to prison on June 9th.

The former head of the Bayou Group was originally sentenced in April, but McMahon allowed Israel to roam free for a few weeks so the prison could line up the multiple medications he needed.  Israel, who is 48, had a pacemaker and was taking various painkillers for back pain. 

Still riding high on the suicide front, Israel told the court room that he attempted suicide by overdosing on the painkillers saying, "I thought it was better to do myself in than to turn myself in."

Although he didn’t enter a plea as of yet, he finally turned himself over to authorities due to medical problems, his mother’s persistence and to top that all off, some sort of divine intervention.

Israel had been hiding out in a mobile home with his girlfriend in Massachusetts.  A grand jury is expected to deliver his fate within the next month.  

Julie Scuderi
Senior Editor for HedgeCo.Net
Email: julie@hedgeco.net

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