Fugitive Executive Surrenders

Less than a month after disappearing under suspicious circumstances, former hedge fund cofounder Samuel Israel gave himself up to authorities Wednesday, the Associated Press reports.

So where was this crooked executive hiding out all this time?

From the Associated Press:

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 believed to be staying at RV parks, campgrounds, or highway rest areas.

RV parks? Highway rest areas? Maybe prison won't be so bad after all...

So what does the future hold for Israel? Former Assistant U.S. Attorney David Kettel, now a partner at the law firm Venable LLP, has some thoughts:

According to Mr. Kettel:

Mr. Israel faces only a maximum of five more years in prison on top of the original 20-year term he was supposed to begin serving the day he disappeared. The new charge is failure to surrender for service of sentence under Title 18 of the United States Code, Section 3146.

The government might have had a false sense of security with Mr. Israel, since he was seemingly cooperating with them since investigations into Bayou Management began in 2005. Mr. Kettel notes that "Israel was never indicted, since he plead to 'an information,' which the U.S. Attorney signed off on." This sense of security also probably had something to do with the relatively low bond that Mr. Israel had to post.

The $500,000, unsecured bond probably factored in Mr. Israel's decision to flee as well. Mr. Kettel points out that defendants in much smaller cases have had to post much larger bonds and secure them with personal property or other assets. Mr. Israel already had to forfeit $450 million under his plea agreement, so a mere half million more was not enough to make him turn himself in.

What's next: In addition to immediately being placed in prison to start serving the original 20-year sentence, Mr. Israel will forfeit his $500,000 bond. In addition, there will be an ancillary criminal forfeiture proceeding for the victims of Mr. Israel's fraud. There are many victims that Mr. Israel defrauded through Bayou Management, and they will be making claims against the $450 million that was ordered forfeited. Approximately $100 million of that amount was taken from a Bank of America account, according to the Preliminary Order of Forfeiture on file.