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

Why Ponzi Schemes Work: An In-Depth Look At The Allen Stanford Fraud

Dec 21 2014 | 10:30am ET

Texan Allen Stanford first appeared on the radars of financial regulators in 1997...

Lifestyle

Hedgie Funds US Squash Program

Dec 24 2014 | 8:46am ET

Squash, anyone?

Guest Contributor

EidoSearch’s Top Three Market Projections For 2015

Dec 23 2014 | 4:03am ET

It is that time of year again when prognosticators make their big market calls for...

 

Sponsored Content

Editor's Note

    Guidelines for Guest Articles

    Oct 22 2014 | 9:46am ET

    We are always looking for guest articles from hedge fund managers and buy-side firms.

    If you are interested in submitting a contributed piece for possible publication on FINalternatives, please take a look at the specs. Read more…

 

Futures Magazine

December 2014 Cover

Futures 2014 person of the year

Jeff Sprecher was simply looking for a platform to trade energies when launching ICE 14 years ago but it has grown to reach the pinnacle of both the listed futures and equities world.

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.