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Girlfriend of vanished fraudster could face a 10-year jail stretch

When police found an abandoned SUV on Bear Mountain suspension bridge over the Hudson River in upstate New York, with the keys and a half-full bottle of painkillers inside the car and the legend "Suicide is Painless" scrawled in the dust on the bonnet, the case was open and shut. Samuel Israel III, notorious ex-hedge fund manager, was trying to fool us again.

It is three years since Israel, scion of a wealthy New Orleans family with a rich pedigree in trading on Wall Street, admitted that the profits of his hedge fund business were an elaborate fiction: he had swindled investors out of $450m (£230m).

The police are now certain he concocted a fictional suicide on the day he was due to report to prison to begin a 20-year stretch for fraud. After a handful of arrests, and charges last week against Debra Ryan, the girlfriend he left behind, investigators have pieced together how Israel hatched his escape plan. What they don't know yet is where the hell he is.

It is a mystery that is consuming the gossip-frenzied hedge fund industry. Namibia? Bahrain? Cambodia? There are any number of exotic climes, countries without an extradition treaty with the US, where Israel may be sipping his pina coladas. All the industry blogs have their wild speculations.

According to the charges brought against Ms Ryan, who faces up to 10 years in prison if convicted of aiding and abetting his flight, the pair spent two days getting a caravan ready for the getaway. On the morning of his disappearance, they left it ready at a motorway rest stop. Ms Ryan is now on $75,000 bail.

Whether Israel really has managed to flee the US remains to be seen. At this point, the smart money – and all police efforts – is going on a much more prosaic reality. For now, police are scouring the caravan parks in the north-eastern US, where the wanted posters being circulated describe balding, goateed Israel – also known by the aliases Sam Ryan and David S Clapp – at 5ft 11in and 200lbs, as possibly "armed and dangerous".

The authorities can ill-afford to let him give them the slip, since there is already one high-profile white-collar fraud suspect cocking a snook at the US justice system. Kobi Alexander, accused of diddling the share options at his technology company, is on the lam and living it up in Namibia, where American attempts to extradite him are being ignored. From time to time, The Wall Street Journal checks to see what he's up to and the financial world raises an admiring glass to his derring-do.

Lawyers are beginning to suggest that it is time to re-examine the approach to bail in the US justice system as it relates to white-collar crime. Fraudsters are routinely allowed to stay out of prison, even after a guilty plea or verdict, and are given a date when they must report to prison themselves.


From Belfast Telegraph