Israel To Plead Guilty To Bail-Jumping, Eventually

Aug 7 2008 | 8:41am ET

When dealing with the likes of Samuel Israel, it seems no one wants to take any chances.

The convicted hedge fund fraudster, who swindled his Bayou Group clients out of $450 million, tried twice yesterday to plead guilty to charges of bail-jumping, but was stymied both times, once by procedure, and once by a wary federal judge.

As Israel himself noted in the first of two hearings yesterday at the federal courthouse in White Plains, N.Y., “this is a fairly straightforward issue.” His SUV was found idling on a bridge north of New York City with the words “suicide is painless” scrawled on the hood on June 9, the day he was set to report to prison to begin a 20-year sentence. Yet despite the overwhelming evidence that he did not, in fact, kill himself—his presence in the flesh in the courtroom—U.S. District Court Judge Kenenth Karas demurred after Israel pronounced himself “60 to 70%” competent to enter a plea.

“I’m a little shaky,” he told the judge. “But that’s life.”

Not wanting to give the one-time fugitive cause for appeal, Karas delayed his plea hearing until Sept. 16 to allow Israel to finish being weaned from methadone. Despite his trembling hands and self-professed cloudiness, Israel insisted that he wanted to enter a plea, and the federal prosecutor said “the government is confident going forward on this today.” But Karas refused.

“I have to be satisfied that you’re competent,” Karas said. “The fact that there is some doubt about that makes it imprudent to go forward today.”

Earlier in the day, Israel’s attempt to waive his right to indictment and plead guilty to a felony information document was derailed by chance: the random selection of Karas, who, unlike most federal judges, does not allow magistrate judges to take pleas for him.

“I understand that you have decided to enter a plea of guilty,” U.S. Magistrate Judge Lisa Margaret Smith told Israel during the earlier hearing, before sending the case to Karas.

Israel faces an additional 10 years in prison on the failure to report charges.


In Depth

Q&A: Brevan Howard’s Charlotte Valeur Talks Strategy

Sep 18 2014 | 11:18am ET

Charlotte Valeur chairs the board of Brevan Howard Credit Catalysts, an LSE listed...

Lifestyle

Hedgies Rock Out For Children's Charity

Sep 15 2014 | 8:40am ET

It's that time of year again—when hedgies trade in their spreadsheets for guitars...

Guest Contributor

Volkered: How Financial Sector Reforms are Creating Opportunities for Hedge Funds

Sep 16 2014 | 11:28am ET

New regulations have dramatically curtailed proprietary trading activity in investment...

 

Editor's Note

    Get A Sneak Peak Of The Alpha Pages

    Aug 25 2014 | 11:21am ET

    As many of you know, FINalternatives was recently acquired by the owners of Futures magazine, a firm called The Alpha Pages LLC. Today marks the soft-launch of a new sister site for both publications. As its name suggests, The Alpha Pages will cover all types of alternative investments, going far beyond the more well-known ones such as hedge funds and private equity. Read more…

 

Futures Magazine

September 2014 Cover

The London Whale: Rogue risk management

Credit default swaps brought down the London Whale and cost JPMorgan $6.2 billion. Here is how it happened.

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.