West Palm Beach (HedgeCo.Net) – Samuel Israel III, the former hedge fund manager for the Bayou Group, has been sentenced to 20 years in prison, one of the longest terms ever given to a white-collar criminal.
Israel pleaaded guilty in September 2005 to fraud and conspiracy after him and his partner, Daniel Marino, conned investors out of over $450 million.
According to the original claims by the SEC, from 1996 to 2005, the two men grossly exagerated the fund’s performance, when in fact, the funds had never posted a year-end profit.
Israel and Marino also forged audited financial statements to hide the trading losses, as well as set up a ficticious accounting firm that they used to fabricate annual "independent" audits to back up their pretend numbers.
U.S. District Judge Colleen McMahon could have given Israel 30 years in prison. However, his cooperation with the U.S. government during the investigation knocked 10 years off the maximum sentence. Marino also received 10 years for his role in the scam. The two will pay $300 million in restitution.
Julie Scuderi
Senior Editor for HedgeCo.Net
Email: julie@hedgeco.net
Senior Editor for HedgeCo.Net
Email: julie@hedgeco.net
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