Convicted Hedge Fund Swindler to Undergo Medical and Psychological Evaluation

By Aaron Poehler

Published on October 28, 2008

U.S. District Court Judge Kenneth Karas has ordered convicted hedge fund swindler Samuel Israel to undergo a thorough evaluation in order to determine whether or not Israel is competent to plead guilty to bail-jumping charges.

Israel, the former head of the collapsed Bayou Group LLC hedge fund, received a 20-year sentence in April of this year for his role in a Ponzi scheme that defrauded investors out of approximately $450 million. Israel currently stands accused of jumping bail by attempting to fake his suicide on the day he was scheduled to report to prison.

After surrendering to authorities on July 2, Israel forfeited his $500,000 bail, and currently faces up to 10 years added onto his 20-year sentence. However, Judge Karas refused to take Israel's plea of guilty on Aug. 6, stating that he was unconvinced that Israel was fit to enter the plea due to concern over Israel's mental state as well as use of methadone to treat an addiction to pain medication.

According to a spokesman for Manhattan U.S. Attorney Michael Garcia, Israel will now undergo a thorough physical and mental evaluation during a 90-day stay at a medical prison located in Butner, North Carolina.

Judge Karras has scheduled Israel's next hearing for Feb. 27 of next year in White Plains, New York.

 

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