Thursday, 5 March 2015
Last updated 5 hours ago
Apr 14 2008 | 3:57pm ET
Samuel Israel, co-founder and CEO of collapsed hedge fund Bayou Group, was sentenced to 20 years in prison today for his role in the fraud that cost investors $450 million.
Rejecting pleas for clemency based on Israel’s health problems and cooperation with the government, U.S. District Judge Colleen McMahon—who Israel’s lawyers have accused of being prejudiced against their client—actually handed down the maximum sentence of 30 years. But she directed that Israel can serve his five year sentences for investor adviser fraud and conspiracy concurrently with his 20 year sentence for mail fraud. McMahon also order him to pay $300 million in restitution.
“I lied to you and cheated you and I cannot put into words how sorry I am,” Israel told investors at this morning’s hearing. He is set to report to jail on June 9; until then, he remains free on bail.
McMahon, who earlier this year sentenced Israel’s co-conspirators, former Bayou CFO Daniel Marino and co-founder James Marquez, to 20 years and four-and-a-half years, respectively.
Israel pleaded guilty to the fraud charges in September 2005.
The judge, who has taken a noticeably harsh tone at times when dealing with Israel, did not spare him her harsh tongue today, disposing of the arguments for mercy without pity.
“He suffered from these ailments while he did the crime,” McMahon said of Israel’s plea for leniency based on his nine back operations, painkiller addiction and pacemaker. “He can deal with them while he does that time.”
As for his cooperation with investigators, she was equally dismissive.
“After he was caught, he stopped lying,” she scoffed. “Good for him.”
Jan 23 2015 | 1:00pm ET
In our new section, FINtech Focus, we will profile one of these firms each week. While fintech is a broad category, we will be focusing on firms that specifically cater to the alternative investment industry. Read more…