This report aired Dateline Friday, Sept. 5, 10 p.m.
NEW YORK CITY — No one knows for sure why the story of Sam Israel III found its way to Bear Mountain Bridge. Israel was a millionaire living the high life. He had a boat, a nice house, and some cars.
Suddenly, he was at the center of a mystery high up above the Hudson River. High noon, one bright spring day, Wall Street financier Sam Israel was gone.
Dead or alive? No one knew for sure. Also missing was about $300 million of investor’s cash.
Had it been a bad day on Wall Street, or an elaborate con?
To understand the spectacular rise and precipitous fall of Sam Israel III, presumably from a bridge over the Hudson River, is to accept that for many Americans, in the last decade, being merely rich just didn’t cut it anymore.
You weren’t a player unless your private jet had non-stop range to the south of France, where your captain sometimes anchored your 200-plus foot yacht before you returned to your 35-room estate in Greenwich, Connecticut, with its garage full of exotic wheels.
This giddy era, before the market’s recent swan dive, was dubbed “the new gilded age” and some of the young men becoming as rich as any Rockefeller or Andrew Carnegie of days past were masters of something known on Wall Street as a "hedge fund." Top hedge fund managers have been reported to make anywhere from $100 million to a billion dollars a year. They do it by making already wealthy people and institutions even richer.
Someone who wanted in on the hedge fund action in the worst way was Samuel Israel III. He was a Wall Street guy who’d worked his way up here and there in the ‘80s and ‘90s as a trader.
His kin, the Israel family of New Orleans, had built from scratch one of the largest trading companies in America— sugar, cocoa, coffee, turning themselves from immigrants to old money in the space of three generations.
So when Sam III set up his own hedge fund in 1996, he had the best assets any aspiring trader could hope for—family connections.
CNBC’s Maria Bartiromo: Sam Israel had access to a lot of big hitters having come from business. He knew that the people around him in his circles had a lot of money.
A hedge fund, like the one Sam Israel was starting up, is like a private club for wealthy investors. It usually takes a million dollars to get in the door.
And the very best hedge fund managers are a high priesthood of brilliant traders. They place complex bets that can pay off handsomely, even when others are losing their shirts.
Bartiromo: When you invest in a hedge fund you are not investing in a name of a company, you are investing in the individual running it. And I think that was the case for of Sam Israel.
He called his hedge fund “Bayou” evoking his N’awlins heritage, and all those savvy traders who’d come before him.
Randy Shain, investigator: He was playing on his pedigree as being, “This is my grandfather and my great-grandfather, my father, and now me..”
Randy Shain is a kind of Wall Street private eye. He runs a business that checks out hedge funds for prospective investors.
Shain: That was his whole pitch.
Dennis Murphy, Dateline correspondent: "I am a rooted person, I am of this industry."
Shain: Correct. "Trading's in my blood. I can do it."
Bartiromo: He had access to some of the great investors around who believed him, trusted him, and gave him money to invest.
And it appeared that trust was well-placed. In the years to come, in boom times or bust, Sam Israel’s Bayou Fund always turned a profit.
More savvy investors anted up and by 2003 he was day trading with hundreds of millions of dollars.
With success came reward, and some perks of an outsized, hedge fund manager lifestyle. The divorced father of two lived in this mansion outside New York City. He rented the estate from none other that Donald Trump for a cool $32,000 per month.
Across the country and across the financial universe was John Seigesmund, a Denver attorney. Well-off, thank you very much, but more apt to collect guitars than bling sports cars.
Murphy: He put you on the map for where you are personally? Are you, "Do I take the Porsche today or the Ferrari?"
John Seigesmund, attorney and investor: Oh, no. We are comfortable but I would describe us as upper-middleclass.
John and his wife had put aside a sizable retirement nest egg but in 2003 their money was just doggy-paddling in a ho-hum stock market.
Seigesmund: It was either flat or drifting lower. So, I was looking for some alternative investments.
As a devoted watcher of CNBC and finance gurus like Jim Cramer, Seigesmund knew that there were hedge funds out there making truckloads of money for rich investors.
But for him, they seemed too risky and too expensive.
Seigesmund: They were just in a different world. They were for people with a lot more money.
Then Siegesmund read about the Bayou fund in a popular investment newsletter. As hedge funds go, Sam Israel’s was more conservative than most, and...
Seigesmund: It's unusual because you can get in for $250,000.
Murphy: Rather than a million.
Seigesmund: Rather than a million. [$250,000 was] a number which was still a thinker for me but now within the realm of reason—as opposed to a million, which was not.
A Bayou salesman promptly dispatched a glossy pitch packet. Inside was a glowing write up from a well-known investment advisor, describing Sam Israel’s trading genius.
Seigesmund: And said all the right things, like, “You have to understand. If you invest in Bayou, you’re pretty much investing with Sam Israel. It’s his talents that are making this work. He’s the guy, he knows what he’s doing.
Murphy: So, the fund looked attractive, the amount to get in looked attractive, and this guy seemed to have a hot hand.
Murphy: Conservative bets... which is what you wanted.
Seigesmund: Exactly what I wanted.
So in early 2003, five years before the mysterious events on that Hudson River Bridge, John Siegesmund was sold on Sam Israel III.
Seigesmund: And then I wrote him a check. And I remember I sat in my office. I can see myself doing it right now, writing out a check for $250,000 and thinking, “This is either the smartest thing I’ve ever done, or the dumbest thing I’ve ever done.”
Denver attorney John Siegesmund had put his faith and a chunk of his money in the hands of hedge fund manager Samuel Israel III.
And, for a time, it seemed like the smartest investment of his life too.
Investors got weekly updates emailed from Sam Israel, and the news was almost uniformly good.
Bayou was like Goldilocks: Not too much, not too little, just right.
John Siegesmund, investor: Sometimes they’d be down a little bit, sometimes they’d be up a little bit. But it was slowly moving up, which is exactly what I wanted.
Dennis Murphy, Dateline correspondent: So for a couple of years this thing is ticking along very nicely.
Seigesmund: Wonderful. Yeah, it’s great.
Murphy: “We’re up a little, we’re down a little, but life is okay.”
Seigesmund: I thought about putting more money in.
And he wasn’t alone. Randy Shain, who does background checks on hedge fund mangers, says that over the years several clients contacted his company to say they were thinking about investing with Sam Israel.
Randy Shain, investigator: Clients are coming to us and saying, “We’re looking to see whether this person is who they say they are, whether they’ve been honest, whether they’ve been sued or what their character might be.”
Murphy: Why do you need to have your own detectives?
Shain: When you’re looking at investing $5 million, $10 million, or $20 million into someone where you’re basically counting on their reputation and their track record to insure the success of that investment, it behooves you to check into those things.
But while many new investors were pouring into Bayou based on its steady profits, Randy Shain was less than impressed by what he was learning about Sam Israel.
Right off the bat, Shain uncovered a small but perhaps telling detail from Israel’s storied New Orleans past. He had attended Tulane University where—by the way—there’s a Samuel Israel building named for his grandfather. But Sam the 3rd had never actually graduated from college.
Shain: There are plenty of industries where schooling doesn’t matter. This happens to be one that in my opinion, it does.
And Shain says that just the start: He learned that Sam Israel had exaggerated his professional resume, fudging dates and overstating his responsibilities for one key job in the bio he sent out to prospective investors.
And back in the early ‘90s, the up and coming Wall Street whiz had been sued for not paying rent on an apartment in a Manhattan high-rise.
Shain: Which is very odd. At that point, he was then mid-30s. He’s not a 22 year old kid who’s out of school and who takes an apartment with his buddies, and they can’t pay. This is a guy who’s proposing to run a hedge fund. This is just prior to his financial history just prior to that.
Also in the category of behavior unbecoming to a trusted money-manager, in 1999, three years into running the Bayou Hedge fund, Israel had been arrested for drunk-driving—and cops say illegal drugs were found in his car.
Shain: Again, it speaks to judgment when you’re in your 20s sometimes, people will forgive that, but not when you’re 40.
But perhaps most troubling of all was this... a lawsuit from 2003 that hinted at book-keeping problems inside the multi-million dollar hedge fund. A Bayou employee claimed he was fired for asking too many questions.
Shain: Essentially, what he was saying was, “There’s a $7 million money capital account. The money’s gone. Where is it?” That’s when he approaches Sam Israel and says, “What’s going on with this?” Israel doesn’t answer him.
Shain: And then they fire him.
At the time, Israel said those were fabrications from a disgruntled ex-employee and the lawsuit was later settled.
But to private detective Randy Shain, who says he’s checked out perhaps a thousand hedge fund managers, something seemed not quite right with Samuel Israel III.
Murphy: You personally, would you have loaned this guy $100 bucks? Told him to invest it for you?
Shain: I would have been as far away in the other direction.
And yet, what did any of it matter when Sam Israel’s fund was clearly doing well. By 2005, the total investments in Bayou were around $300 million plus profits. And despite the book-keeping allegations in that lawsuit, the Bayou ledgers were checked out and certified each and every year by Richmond Fairfield Associates, a New York City accounting firm.
And according to those faithful account updates, John Seigesmund’s $250,000 investment was now worth a good deal more.
Seigesmund: $336,000, so I was up about $86,000.
Murphy: So, that’s good.
Seigesmund: Oh, that was fine.
So it was with surprise and a little disappointment that in the summer of 2005 John Siegesmundgreeted this letter from Sam Israel III.
Seigesmund: The letter says basically—“It’s been a great run, but I regret to tell you that I’ve decided to fold up Bayou because I wanna spend more time with my family.” “It’s been swell but it’s time to say goodbye. And the checks will be in the mail soon.”
Murphy: So, “the check is in the mail.”
Seigesmund: The check was promised to be in the mail.
The promised date came. And the promised date went. No check arrived.
Seigesmund: I’m thinking, "Huh?" And so I pick up the phone and I call Bayou, which I’d done dozens of times over year. And there’s no answer.
Murphy: Does it go to voicemail?
Seigesmund: It goes to voicemail. And the voicemail box is full. And I think, “Ahhh… this can’t be good.”
That something was NOT GOOD at Bayou would turn out to be more than a slight understatement. At the time, there was no clue where the money troubles at the hedge fund would lead. Before it was over, there’d be reports of suicide, an international manhunt, and a mystery set high up above the Hudson River.
John Siegesmund wasn’t the only investor with an inkling that something was horribly wrong at Sam Israel’s Bayou hedge fund.
John Seigesmund, investor: “What’s going on? Did somebody die? I mean, why is nobody answering the phone?”
The checks were allegedly in the mail, but at this Stamford, Connecticut house-turned-office where the Bayou fund was headquartered, the phones were ringing off the hook.
Attorney Ross Intelisano represents a group of investors who’d put a combined $25 million into Bayou.
Ross Intelisano, attorney for Israel lawsuit: All the investors were calling Bayou to find out, “Where’s the money? Where’s the money?” No one was answering the phone.
And nor was anyone apparently home at the mansion Sam Israel had rented from Donald Trump.
Seigesmund: Nobody could find him. Nobody knew where he was.
Not content to wait for the mailman, one investor who was owed a whopping $53 million flew across the country to try to retrieve his money in person.
He thought he could get some answers from Israel’s # 2 in command, an accountant who was also the Bayou Chief Financial Officer, a guy named Dan Marino.
Intelisano: He was known as sort of schlubby guy, had a lisp, wasn’t exactly the front man that Israel was.
But Marino, a behind-the-scenes guy who kept the Bayou books, was nowhere to be seen either. And after knocking on the door, that persistent investor let himself into the abandoned Bayou offices through an unlocked back entrance.
There, on the accountant’s desk, was this startling document.
In six neatly typed, single spaced pages, the saga of the Bayou hedge fund would go from bad to worse than anyone could have imagined.
“If there is a hell, I will be there for eternity,” the document reads.
It was a suicide note.
The suicide note, left by chief Bayou accountant was also a jaw-dropping confession. In it, he claimed that Sam Israel’s hedge fund had been a complete sham, almost from day one.
There’d been no profits ever. And much worse, apparently not a penny of the millions that investors had been expecting in the mail remained.
The investor who found the suicide note immediately called 9-1-1 and the search was on for the Bayou accountant. Was he already dead, or perhaps still alive? Was anything what it seemed?
Meantime, word leaked out to the business press that Bayou was belly-up.
Intelisano: The investors were literally freaking out.
Investor John Siegesmund was online searching for news about Bayou, still waiting for his $250,000+ check when he read the first reports.
Seigesmund: The blood drained from my face… to realize that you had the money yesterday and today it is gone. And nobody has any idea if any of it is left or if so where it might be?
But with an accountant’s precision, the suicide note laid out an elaborate set of lies.
Intelisano: It walks through the entire story.
Dennis Murphy, Dateline correspondent: “Here’s how much money we had. Here’s how we lost it.”
Intelisano: “You know, we claimed to have $100 million one year, but we really only had $40 million. We claimed to grew to $300 million, but we really only had $150,000,000.”
Murphy: So, the emails saying, “We had a terrific quarter,” were lies.
Intelisano: Absolute lies.
But how could a scheme of this magnitude have gone undetected for so long? Hadn’t the fund—as is required by law—been audited every year?
Well the CFO’s suicide note explained that too: The accounting firm that vouched for the Bayou books was, like all the reported profits, utterly non-existent.
Another lie, apparently directed by Sam Israel III.
Intelisano: They actually created a accounting firm, that was fake, to do annual audits.
Murphy: It is a fake accounting firm.
Intelisano: Fake accounting firm.
Murphy: There were no other clients.
Intelisano: You call up, you get a voicemail that say, “Hi, you’ve reached Richmond Fairfield Associates. Please leave a message.” They had an office address in New York but if you went there, there was nothing there.
Even Wall Street investigator Randy Shain, who had suspected something was not quite right with Sam Israel, was shocked by the brazen deceit.
Murphy: The annual report of the Bayou fund when it said it came with the seal of Richmond-Fairfield accounting service, we’ve looked at these numbers and they look good to us...was useless?
Shain: Well, worse than useless in that now you have this sort of stamp of, you know, the "Good Housekeeping seal of approval" when the reality is, that’s the seal of "we’re screwing you."
With its phony returns, Sam Israel’s Bayou fund, had attracted plenty of sophisticated, wealthy investors.
But in the end it was nothing more than an old fashioned Ponzi scheme.
Shain: I think what they did was just Ponzi it.
Murphy: So the classic Ponzi scheme is the suckers coming in the door—
Shain: Sure. Paying the old people—
Murphy: --paying the money are paying for the suckers who are already—
Shain: Right. "We’ll get more money because we’ll say we’re making money…"
After the shock wore off, John Siegesmund realized he’d been had, but good.
Seigesmund: This was a well-thought out, well orchestrated, long term pattern of cold blooded deceit.
A cold-blooded deceit in which, according to his six-page confession, accountant Dan Marino had been a mere pawn. He apologized. And said goodbye.
“I am sorry” he wrote. “I know God will have no mercy on my soul.”
Murphy: This was a suicide note?
Intelisano: Oh, yes. Oh, yes.
Murphy: But there wasn’t a suicide.
Intelisano: He did not kill himself.
After all that death-bed confessing, the Bayou accountant turned up alive and well.
In fact, police were able to reached him at home within hours of the suicide note being found. His plan to kill himself had either gone awry or had never been attempted.
The note, now in the hands of the FBI, read like a play book for a litany of federal crimes.
And soon enough, Dan Marino the accountant was cooperating with prosecutors who, like the Bayou investors, were more than a little eager to talk to Mr. Sam III.
Federal prosecutors had been handed a gift in the form of a suicide note written by an accountant inside Sam Israel’s Bayou Hedge Fund.
And as if to make thing even easier, the accountant hadn’t actually killed himself, but was now talking to the Feds about crimes he’d laid out in his 6-page mea culpa. It outlined hundreds of Bayou investors bilked out of around $300 million.
Dennis Murphy, Dateline correspondent: That’s really a blueprint for the fraud, isn’t it?
Ross Intelisano, attorney: Absolutely, and the government used that as a blueprint to prosecute them.
Sam Israel had been lying low for weeks, but once the bad news about Bayou made headlines, his attorneys got in touch with federal prosecutors, and soon Israel turned himself in.
In September 2005, he pleaded guilty to 3 counts of federal investor and mail fraud.
For Sam Israel III, the new gilded age had ended early.
Maria Bartiromo, CNBC Anchor: You’re living the high life. And then it’s gone because you were living it on a lie.
It was now up to a federal judge in New York to decide what exactly to do with him. Would it be a white-collar slap on the wrist?
Not if investors had anything to say about it.
John Seigesmund, investor: The guy belongs in jail.
John Siegesmund sent a letter to the judge handling the case asking her to put Sam Israel away for a very long time.
Seigesmund: As I said in the letter, nobody’s gonna have to eat peanut butter at our house for the rest of our lives. We’re not destitute. But this hurt. This guy stole $250,000 of my money. That hurts.
There were letters from a few other outraged victims that made it into the court file. But for each of those, there were several more in support of Sam Israel.
Friends and family, mostly connected to his high-society parents back in New Orleans, wrote to the judge begging for mercy.
Those letters, plus a 55-page brief prepared by his attorney, detailed a side of Sam Israel that most investors never knew: He was a lover of animals, a faithful friend. He was also a drug-addict, hooked on prescription pain killers, the result of nine serious back surgeries. His friends and family believed the drugs had impaired Sam’s normally good judgment.
And most of all, they uniformly agreed, Sam Israel may have lied to investors, but he was no common criminal.
Sam Israel had pleaded guilty to fraud, but his case for little jail time came down to his intent. Supporters said he’d never set out to steal anything—but was just desperately trying to live up to the respected Israel family name. Problem was Sam was a dismal failure as a hedge fund manager and simply couldn’t admit it.
Bartiromo: I don't know that he had this master plan to defraud investors. But he kept losing money and kept trying to dig himself out of it. And was lying all the way down thinking that he could turn this around.
Randy Shain, investigator: You could say he’s not a criminal, criminal. He’s just a guy who probably believed in his own investing skills, which clearly was a mistake.
Leading up to his sentencing, Sam Israel had been living free on bail for more than 2 years, tending to his health problems and cooperating with authorities trying to trace the missing Bayou millions.
So come judgment day in April 2008, he might have thought the odds for leniency looked pretty good. The judge had discretion to give him anywhere from 30 years to just a few months.
Intelisano: He was joking with his lawyers. He had a very big family contingent there which, it seemed like, did not come from New York, and likely from New Orleans.
Lawyer Ross Intelisano, whose clients lost a combined $25 million, was in the courtroom to hear what Sam Israel had to say for himself.
Intelisano: He talked more about the pressures of being a third generation trader in the Israel family as opposed—
Murphy: The shame brought to the family name, huh?
Intelisano: Exactly, as opposed to apologizing profusely to the investors that he defrauded.
Investors like John Siegesmund whose $250,000 was up in smoke...
Seigesmund: You know, this is not to defend Sam Israel. But, I think he was a massively delusional man.
The judge apparently agreed.
Intelisano: The judge really was laying into him and said that “This is no excuse. Pressure is not being a third-generation trader. Pressure is being a single mother, trying to take care of four kids.”
During the process of the sentencing hearing you saw him go from this kind of jovial character to sweating bulleting, thinking, “Oh my goodness, I’m going to jail.”
The judge gave Israel 20 years. Likewise for accountant Dan Marino, whose phony suicide note had exposed the fraud. Those were hefty sentences for white collar crime, on par with the punishments handed down in the massive Enron fiasco.
Intelisano: I think this was certainly a message that, “If you commit fraud, even if it’s fraud upon wealthy people, you’re going to jail for a long time.”
Not that he’s vengeful, but the news sat pretty well at the Siegesmund home in Denver.
Murphy: Is Sam Israel a thief or just a bum stock picker?
Seigesmund: Oh, he’s a thief. Oh, he’s a thief. He happens to be a bum stock picker. But, he’s a thief.
By the time Sam Israel had been sentenced to 20 years in federal prison, John Seigesmund had adopted a new, Zen-like perspective on the crime.
John Seigesmund, victim: Every time I start to get worked up about Bayou, every time I start to think about how mad I am, every time I start to think about how I got suckered, my mantra is: he took $250,000 of your money, that’s all he gets. He doesn’t get to spoil one day of your life after this.
Easier said than done—especially on one particular day in June, two months after the criminal case against Sam Israel was for all intents and purposes over.
Seigesmund: Every morning I watch CNBC. And I’m sitting there watching Squawk Box and—there’s a runner that comes down below the screen that, “Sam Israel has jumped in an apparent suicide.”
Jumped? But wasn’t Sam Israel locked up, the key more or less thrown away?
Turns out, that in one concession to mercy, the judge in the case had allowed him two more months free on bail to get his affairs in order.
He was supposed to report to prison in Massachusetts by 2 p.m. on June 9. Instead, just after high noon on that very day, local cops found Israel’s SUV abandoned on the Bear Mountain Bridge, not far from his home north of New York City.
Three words on the vehicle’s hood said it all: “Suicide is Painless”... or at least better than 20 years behind bars.
Seigesmund: He couldn’t bear to go to prison. He just decides that that’s not something he’s gonna do.
Rescue boats combed the Hudson River below, though surviving such a leap was all but impossible. Cops said they’d seen been at least 30 deadly plunges from that very bridge. The rescue teams were looking for Sam Israel’s remains.
But then after a day of searching and no body, a spokesman for the New York state police was parsing his words in a rather telling way.
New York State police: We are still conducting the investigation as though a suicide occurred, but it hasn’t been factually determined yet.
Seigesmund: When you jump off a bridge, not that I’m an expert in people jumping off of bridges, but, they find bodies. They don’t just vanish.
As news of Sam Israel’s suicide spread, so did the skepticism.
Ross Intelisano, attorney: Our initial reaction and all the investor’s initial reaction was, “There’s no way this guy ever jumped.”
Murphy: You never bought it.
Intelisano: No. No one. I don’t think anyone [did]. Having already seen one false suicide note in this case, we didn’t believe the second one either.
In a case that already had one report of a false suicide, there was reason to believe that what was supposed to have happened here on the Bear Mountain Bridge may in fact have been the ultimate hoax of a veteran con man.
For starters, wouldn’t you think that Sam Israel, with his bad back and addiction to pain-killers would have taken an overdose of pills rather than jump into the Hudson?
And there was this Israel’s girlfriend, presumably the last person to see him alive, told cops that he’d intended to drive himself to prison. But think about it... Where was he planning to park his car for the next 20 years?
And then, there was that message on the hood: “Suicide is painless.” The phrase is lifted from the theme to the movie “M*A*S*H.” And any Robert Altman fan can tell you that the movie-suicide, by a character nicknamed “Painless,” was really just a practical joke.
Randy Shain, investigator: As soon as I heard the thing about “Suicide is painless,” I said, “But the person in the M*A*S*H movie didn’t kill themselves.” So couldn’t he use a reference of someone who did?
So were Sam Israel’s parting words, left 150 feet above the mighty Hudson, a final, telling clue?
The search for his remains continued. But where or when he’d turn up, no one had any idea.
The latest act in the Sam Israel show was an apparent suicidal 150 foot plunge off a picturesque bridge spanning the Hudson River. There on his abandoned SUV, scrawled in dust his final message for everyone: “Suicide is painless”
Except no one who knew anything about the man thought he’d actually done it.
Randy Shain, investigator: I think it takes a certain amount of chutzpah to actually jump off a bridge. I don’t see that being his m.o.
So was Sam Israel’s leap into the Hudson really just an elaborate joke? If so, no one in the federal government was laughing. 48 hours after the alleged jump, they issued a wanted poster.
Samuel Israel III was a federal fugitive until proven otherwise.
And when no body turned up after a full week, federal marshals announced they’d officially ruled out suicide as a possibility. The general reaction on Wall Street was: what took you so long?
Maria Bartiromo, CNBC anchor: Everyone I spoke to knew right off the bat, they said “He left town. He’s on the run. Running from the law.”
The investors represented by attorney Ross Intelisano were livid.
Ross Intelisano, attorney: When he got the 20 years people were very satisfied that this man’s gonna go to jail for all the bad stuff he’s done. So that when he did not report to jail, it sort of re-opened these very sore wounds. And the investors are really struggling with it.
The stunt earned Sam Israel a spot of "America’s Most Wanted." The Feds said he could be using any one of many aliases and should be considered armed and dangerous.
This was a Sam Israel no one had heard of before.
Shain: I didn’t see him as some sort of, you know, "Bourne Identity" kind of guy But he’s pulling it off for now. And with enough money, anything’s possible.
An army of accountants and lawyers were still sorting out the unresolved questions of what had really happened to the nearly $300 million investors had given Sam Israel?
Turns out, $100 million had been parked in an Arizona bank. Regulators there noticed suspicious transfers and traced the cash back to Bayou.
As for the rest? Most of it seemed to have gone up in smoke in bad trades.
But some thought it was possible that Sam Israel had stashed away a sizable chunk.
Intelisano: Because the trading activity shows trading losses of under $100 million. And they found $100 million.
Dennis Murphy, Dateline correspondent: So there’s $50 million to $100 million out there somewhere still?
Intelisano: Potentially. Now, does he have that money? I don’t know. I don’t know where that money is.
That kind of change could certainly buy a black market passport and a one-way ticket to anywhere… preferably a nice country with no U.S. extradition treaty.
Bartiromo: Well, people thought that he had fake passports and he was leaving the country. You know? That he was gone.
And so it went for a time last summer, in newsrooms and on Wall Street… speculation about where in the world was Sam Israel III. Was he in South America? Africa? Possibly making withdrawals from a secret Swiss Bank Account?
When investigators got their first break in the case, however, it wasn’t from overseas but from clues left right on the bridge. Surveillance footage from the bridges security cameras showed a car pull alongside Israel’s SUV right around the time he disappeared.
Sources told New York’s WNBC-TV that cops were able to trace the second vehicle to a get-away driver. The driver admitted picking Israel up on the bridge and taking him to a nearby rest stop where an RV stocked with his worldly possessions was waiting.
That led to intense questioning of Israel’s girlfriend, Deb Ryan. She eventually broke down and told investigators that she’d helped Sam pack the RV the night before he disappeared.
She was arrested and charged with aiding and abetting.
Intelisano: I think he’s in upstate New York or somewhere, north of New York City in his RV, sleeping in random parks.
Murphy: Just eating slim jims from convenience stores?
Intelisano: And probably struggling physically, because he’s got very major back problems. He takes serious painkillers. So, I think one of the biggest problems he’s gonna have is actually finding his medicine.
But in fact, Israel never left the country at all. He merely drove 100 miles north to Massachusetts and parked his RV in this $40-dollar a night campground. There he registered under the alias David Clapp and blended in among the tourists for most of June, according to the campsite manager.
Mitch Hayes, campsite manger: He seemed like any other camper. Really nice guy, very personable, really easy to talk to. Nothing suspicious at all.
Then, on July 2nd he called it quits.
He left the RV at the campsite and putt-putted by motor scooter to Southwick, Mass. where he walked into the police station and told the desk clerk—“I’m supposed to go to jail.”
Police press conference: He turned himself in voluntarily. He was processed as a fugitive from justice by the Southwick police department and U.S. marshals were contacted.
A crush of news cameras descended in time to see Sam Israel transferred back to federal custody. He told reporters his girlfriend’s arrest had prompted the move.
Samuel Israel, on interview tape: She was arrested. I’m not going to have people I love involved in something they didn’t do.
He was again face to face with the judge by morning. She was, needless to say, not amused and not particularly sympathetic either when Sam Israel told the court that after his fake suicide on the bridge, he’d really tried to kill himself while on the run. He claimed he’d swallowed a bottle-full of morphine pills the night before turning himself in... another suicide attempt apparently gone awry.
Intelisano: The story seems to get crazier every day and every time you don’t think he can top himself, he tends to do something that is even more outrageous.
And as Sam Israel began serving his 20 years behind bars, federal officials revealed this final detail about his time on the lam: Sam’s mother, Ann Israel, had helped orchestrate his surrender.
Apparently she’d been talking to the Feds and talking to Sam. He was reportedly on the phone with her as he walked into Southwick PD.
This final irony was lost on few people following the story: That Sam Israel may have been a Wall Street huckster and a convicted felon, but in the end at least, he listened to his mother. Who surely knew best...
Seigesmund: It was just stupid. And I am delighted that he will serve the next 20 years in a federal prison.
Sam Israel’s adventure in the New Gilded Age is over. From the House of Trump, to the House of Detention.
It looks like there will be restitution for investors like John Seigesmund who lost their money with Bayou. They could get up to half of their original investment back.
Bayou accountant Dan Marino is appealing his 20-year sentence.
And Sam Israel is awaiting trial on new flight charges. If convicted, he could get 10 more years added to his prison sentence.
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