Israel admits he skipped out on prison

March 16, 2009 5:22:36 PM PDT
Hedge-fund swindler Samuel Israel III admitted in court Monday that he went on the lam last year rather than report to prison. Israel, 49, is likely to get at least a year added to the 20-year stretch he was given for bilking investors out of hundreds of millions of dollars.

He calmly told federal Judge Kenneth Karas that he knew he was supposed to surrender on June 9 and understood he was breaking the law when he did not show up.

Israel, co-founder of the Stamford, Conn.-based Bayou hedge funds, did not mention the staged suicide that began his flight.

Prosecutors say he abandoned his SUV on the Bear Mountain Bridge north of New York City, etched "Suicide is Painless" into the dust on the hood, and took off.

"Suicide is Painless" is a song that became famous as the theme of the TV show "MASH." The song was sung during a fake suicide in the 1970 movie the TV show was based on.

Investigators checked for a body in the Hudson River below the bridge but also launched a manhunt. They learned from Israel's girlfriend that he had loaded an RV with clothing and a scooter and gone on the lam.

On July 2, after apparently spending a few weeks in a campground, Israel drove up on his scooter and surrendered at a Southwick, Mass., police station. He was returned to Manhattan; a judge sentenced him the next day for the hedge fund fraud and angrily revoked his $500,000 bail.

Israel, who lived in Armonk, told that judge he had tried to commit suicide for real after becoming a fugitive but it didn't work "and I realized God didn't want me to do that and I turned myself in."

Israel could be sentenced to up to 10 years in prison for failing to surrender. But his attorney, Brian Bohrer, said prosecutors told him that federal guidelines call for a sentence of a year to 18 months. That sentence would begin when his 20-year fraud sentence - which Bohrer said is being appealed - is finished. Karas scheduled sentencing for June 24.

Bohrer said Israel did not mention the fake suicide during Monday's guilty plea because "it wasn't necessary."

Israel has been trying to plead guilty since August, but Karas refused to accept it and ordered a medical evaluation after Israel said treatment for his addiction to painkillers was affecting his thinking.

The medical report came in last month and Karas accepted its conclusion that Israel was competent to stand trial or enter a plea.

The judge questioned Israel closely on Monday about his well-being. Israel said he was taking several medications but had adjusted to them and they weren't affecting his ability to think clearly.

"I'm OK, your Honor," he said.

Israel's girlfriend, Debra Ryan, 45, of Armonk, has pleaded guilty to helping him and is awaiting sentencing. She is also accused of trying to send him $300 in cash while he was in jail by hiding the money in the pages of a magazine.