Fugitive Fund Manager Samuel Israel Surrenders to Police

This article is from the archive of The New York Sun before the launch of its new website in 2022. The Sun has neither altered nor updated such articles but will seek to correct any errors, mis-categorizations or other problems introduced during transfer.

The New York Sun

Fugitive hedge-fund swindler Samuel Israel III surrendered to authorities at Massachusetts nearly a month after he disappeared on the day he was to report to federal prison for scamming investors out of hundreds of millions of dollars, officials said Wednesday.

Israel turned himself in to Southwick, Mass., police between 9:15 and 9:30 a.m. today, police Chief Mark Krynicki’s assistant, Suzanne Anderson, said. She said he was being processed at Southwick police headquarters and referred all further questions to federal authorities.

U.S. Marshal Joseph Guccione in Manhattan said law enforcement authorities were aggressively pursuing Israel when he surrendered at Southwick, about 95 miles away from the federal prison at Ayer, Mass., where Israel was to report last month.

“We believed he was in the country and that’s why we continued our massive manhunt,” he said.

A call to Israel’s lawyer, Lawrence S. Bader, wasn’t immediately returned.

Israel, already facing a 20-year term for conspiracy and fraud, was likely to be charged with failing to surrender to serve a federal sentence, authorities said. He was expected to appear later Wednesday in federal court in Springfield, Mass.

Israel, 48, disappeared June 9 just hours before he was to report to prison to begin serving the sentence handed down in April for his role in the collapse of the Bayou hedge funds. As co-founder and chief executive of the Stamford, Conn.-based company, he also had been ordered to pay $300 million to his victims.

Prosecutors said he and two other men persuaded investors to put $450 million into the funds by announcing nonexistent profits and providing fake audits. Meanwhile, they made millions in commissions on trades that lost money for investors. The collapse of the funds prompted calls for stricter oversight.

Israel’s SUV was found abandoned, its key in the ignition, on a bridge over the Hudson River with the words “Suicide is Painless” — the theme song for the “MASH” television show — scrawled in dust on the hood. The song was sung during a fake suicide in the original movie.

Because no body was found beneath the 150-foot-high bridge, authorities believed from the start that he faked his disappearance.

His girlfriend, Debra Ryan of Armonk, was arrested 10 days after he fled and charged with aiding and abetting his escape.

Officials said that after Israel abandoned his car, he took off in a white recreational vehicle carrying a motor scooter and his belongings. He was thought to be staying at RV parks, campgrounds or highway rest areas.

Southwick, where Israel turned himself in, is near the Connecticut line about 100 miles southwest of Boston.

Ms. Ryan told authorities that on the day Israel was to surrender, she drove her car and he drove the RV to a rest area. Israel parked the RV there, and the two drove back to their home.

After Israel stopped on Bear Mountain Bridge, near West Point about 40 miles north of New York City, surveillance video showed a second car slowly pass his SUV and then stop. That could explain how he got from the bridge to the rest area, but authorities have never confirmed reports that the driver of the second car had been questioned.

Ms. Ryan could face as many as 10 years in prison if convicted in the scheme to help Israel flee.


The New York Sun

© 2025 The New York Sun Company, LLC. All rights reserved.

Use of this site constitutes acceptance of our Terms of Use and Privacy Policy. The material on this site is protected by copyright law and may not be reproduced, distributed, transmitted, cached or otherwise used.

The New York Sun

Sign in or  Create a free account

or
By continuing you agree to our Privacy Policy and Terms of Use