Fed's Arrest Hedge Fund Manager's Girlfriend

June 20, 2008 - (Tip Report) New York- Samuel Israel III, who hailed from a well-to-do Louisiana family, had been convicted of swindling investors out of $400 million in 2005 and was scheduled to show up to begin his prison sentence. But Israel got 'cold feet' and instead, hatched a plan to disappear in which federal Marshalls say was a plot the hedge fund manager's girlfriend, Debra Ryan, was involved in.

The manager of the Bayou hedge fund is wanted by the US Marshals for failure to surrender for sentence. Israel, 48, was sentenced to 20 years in a federal prison by Judge Colleen A. McMahon in April.

Israel's girlfriend, Debra Ryan, was arrested by US Marshalls on Thursday and charged with aiding and abetting his escape.

Ryan, who for ten days denied any involvement, insisting that to her knowledge, her hedge fund manager boyfriend had committed suicide, finally came clean - but until after she was handcuffed and hauled off to jail.

Federal authorities said in the complaint against Ms. Ryan, who is now out on bail, that she helped Israel pack up an RV which the two then drove out to a rest area near Interstate 684 in New York, where the RV was found abandoned with a note scribbled in dust on the hood that read "suicide is painless". The keys and a bottle of sleeping pills were found inside the Israel's abandoned GMC Envoy.

The Feds contend that Ryan had followed Israel in her car and gave him a ride back to their home, where he later took off rather than face twenty years behind bars.

US Marshalls pulled a press release from the government site dated June 17, 2008 in which they were asking for information from anyone who might know the whereabouts of Israel. But you can still find it on Google as a cache page.

Charges were filed against Israel's girlfriend by the US Attorney for the Southern District of New York on June 19, 2008. According to the complaint, Ryan admitted to helping Israel, but no information was given as to whether or not the hedge fund manager's girlfriend, was cooperating further.

Ryan faces 10 years in prison if convicted. Her next court appearance is slated for July 10, 2008 and you can bet US Marshalls are keeping a close eye on Israel's girlfriend's whereabouts!

Feds say campers should be on the look out for Ryan who may be camping in public campsites. They say he's armed and could be dangerous.

But I guess the $300 million in restitution Israel was ordered to pay is more important to the hedge fund investors who trusted the New Orleans investment manager with their money. I guess vanity plates made at the Federal prison have cut of the proceeds going towards restitution. But at the rate Israel would have to crank them out, it'd take a whole lot longer than 20 years to pay them back!