Hedge Fund Scammer Tells NY Judge He Tried Suicide

The hedge fund cheat who tried to fake his own death before going on the lam told a judge today that he really did try to kill himself with a drug overdose the day before he surrendered in Massachusetts.

The unsympathetic judge replied that Samuel Israel III, who scammed nearly half a billion dollars from investors, must forfeit his $500,000 bail.

Israel, 49, went on the run June 9, when he was supposed to report for a 20-year prison sentence. He abandoned his SUV on a bridge north of New York City with the phrase "Suicide is Painless" scrawled in dust on the hood.

The massive manhunt ended yesterday, when Israel rode a scooter to surrender at a Massachusetts police station.

He could face an extra 10 years if he is convicted of a new charge of failing to report to prison.

Israel told a U.S. district judge, Colleen McMahon, that he had decided to commit suicide on Tuesday by swallowing morphine tablets and the painkiller fentanyl.

"I ate the balance of my fentanyl patches because I thought it was better to do myself in than to turn myself in," Israel said. "I woke up battered and bruised and I realized God didn't want me to do that and I turned myself in."

"Stand up Mr. Israel," Judge McMahon sternly told the defendant, who had abruptly sat down while she was speaking. "If you can ride a motorcycle, Mr. Israel, you can stand up in my courtroom."

Israel got the 20-year sentence in April for conspiracy and fraud. Judge McMahon refused to refer him to the prison medical facility to which he had been assigned before he fled.

"It was thrown in my face the last time," she said. "I'm now out of it."

Prosecutors said Israel and two other men scammed investors into putting $450 million into hedge funds by announcing nonexistent profits and providing fake audits, and made millions in commissions on trades that lost money for the investors. The total loss to investors was about $300 million.

After Israel vanished, his SUV was found abandoned on a bridge over the Hudson River at a New York City suburb with the words "Suicide is Painless" — the theme song for the "M…A…S…H" television show — scrawled in dust on the hood.

Authorities scoured the river for a body and quickly determined that the suicide was a ruse — that Israel fled in his white recreational vehicle with a scooter and his belongings. He was thought to be staying at RV parks, campgrounds or highway rest areas. Authorities also arrested Israel's girlfriend on charges that she helped her lover elude the government.

Israel's RV was found at Granville, Mass., officials said. He had planned to surrender there, but the town's part-time police department was closed, so he rode a motor scooter to nearby Southwick, Mass., to turn himself in, authorities said.

He surrended while talking to his mother on his cell phone. Earlier, he had reached out to his sister-in-law, who then called his mother. The mother called someone she trusted at the U.S. Marshals Service.

It was a humbling fall for Israel, who once enjoyed the glamour of an investment banking and hedge fund career that gave him a home in the playpen of the rich. He once rented a house from Donald Trump for $32,000 a month.

Complicating Israel's time on the run were his medical problems. He has had nine back surgeries, wears a pacemaker and is addicted to painkillers, according to prosecutors.

His ailments — along with 21⁄2 years of cooperating with authorities — helped him get less than the maximum 30-year sentence. Judge McMahon also granted him two months to surrender to prison after he was sentenced.