Fugitive hedge-fund founder Israel gets 20 years, additional charges

Samuel Israel, the convicted founder of hedge-fund firm Bayou Group LLC who faked his suicide and jumped bail rather than face prison, was sentenced to 20 years in prison when he appeared Thursday in a Manhattan courtroom.

Israel turned himself in to police Wednesday in Southwick, Mass., 23 days after fleeing. U.S. prosecutors in New York filed new bail-jumping charges; Israel now faces an additional 10 years in prison.

U.S. District Judge Colleen McMahon in Manhattan federal court had allowed Israel, 48, to remain free on bail after his sentencing in April. Israel pleaded guilty in 2005 to securities fraud for directing a $400 million fraud at his now-defunct Stamford, Conn.-based hedge fund company.

"Welcome back, Mr. Israel," McMahon said, ordering his bail forfeited.

On June 9, the day he was to report to prison, Israel's car was found on a bridge north of New York City with the message "suicide is painless" written in the dust on the windshield. Within a week, state and federal authorities in New York ruled out suicide and launched an international manhunt.

After turning himself in Wednesday, Israel appeared Thursday in federal court in Springfield, Mass., where a judge ordered him held without bail and sent back to New York. On leaving the courthouse, he said he surrendered because his girlfriend had been charged with helping him flee.

Sporting a grayish-brown beard, Israel Wednesday told U.S. District Judge Michael Ponsor that he isn't "a danger to the community" and requested he be sent directly to Fort Devens, the federal prison medical facility north of Boston where he was scheduled to begin his sentence. Ponsor said no.

Israel's sentence, which included a $300 million fine, was one of the stiffest prison terms handed down for a white-collar defendant since Enron Corp's 2001 collapse.