Bayou Fraudster Israel Sent For Psych. Exam

Dec 23 2008 | 2:26am ET

Remember Samuel Israel?

In light of the Bernard Madoff scandal, Israel’s $450 million fraud may seem quaint. But the saga of Israel, who was sentenced to 20 years in prison for his role in the Bayou Group hedge fund fraud, and who went on the lam in June, is still ongoing, as he waits for a judge’s permission to plead guilty to charges of bail-jumping.

Israel is finally getting the psychological evaluation order by a judge in October. U.S. District Judge Kenneth Karas in White Plains, N.Y., ordered that the evaluation at the Devens Federal Medical Center outside Boston—the very same prison camp to which Israel was supposed to report on the June morning he disappeared, his SUV found on a bridge north of New York with a suicide note of sorts scrawled into the dust on its windshield. Israel is to be transported from the Westchester County jail, where he has been held since his July surrender, to Devens on Dec. 29, almost seven months after he was supported to turn himself in.

In October, Karas ordered Israel to spend three months at a federal prison in Butner, N.C., for the psychological exam, after delaying the convicted hedge fund fraudster’s plea on bail-jumping charges three times. Last week, Karas demanded to know why Israel was still in New York, and not at the North Carolina facility, leading to a conference on Friday.

In a statement, the U.S. Attorney’s Office for the Southern District of New York said, “at issue was Mr. Israel’s designation to a facility for medical and psychological evaluation.” He is to be returned to U.S. Marshal’s Service custody on Feb. 12, before his bail hearing resumes in White Plains on Feb. 27.

Israel faces as much as 10 additional years in prison on the bail-jumping charges.

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