Israel Plea Delayed Again As Swindler Is Sent For Tests

Oct 28 2008 | 2:02pm ET

Convicted hedge fund swindler Samuel Israel will spend the next three months at a medical prison after a federal judge postponed his plea hearing on bail-jumping charges for the third time.

Israel, the founder of the collapsed hedge fund Bayou Group, was ordered to undergo 90 days of medical and psychological evaluation at a federal prison in North Carolina. He is scheduled to be back in court in White Plains, N.Y., on Feb. 27 to face charges stemming from his three week flight from justice this summer.

For the third time, U.S. District Judge Kenenth Karas barred Israel from pleading guilty to charges that he failed to report to prison to begin a 20-year sentence for his role in the $450 million hedge fund fraud. His last plea hearing, on Sept. 16, was delayed to allow Israel to continue his treatment for painkiller addiction.

Israel was scheduled to report to a federal prison camp outside in Massachusetts in June, but on the day he was scheduled to report, his car was found on a bridge over the Hudson River north of New York City with the words, “suicide is painless,” scrawled on the windshield. He turned himself in to police three weeks later.

Israel, who appeared in court today with a bandaged hand—his lawyer said he had broken it—faces as much as 10 additional years in prison on the bail-jumping charges.

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    One of the most unique charity benefits in the hedge fund industry, A Leg To Stand On's (ALTSO's) Hedge Fund Rocktoberfest - NYC, raised nearly $500,000 last Thursday thanks to the generous support of major sponsors and nearly 1,400 attendees from the Tri-State finance, business and hedge fund communities. Read more…