The most recent case involves Samuel Israel III, co-founder of bankrupt hedge fund Bayou Group LLP. He was sentenced to 20 years in prison in April for orchestrating a Ponzi scheme that defrauded investors out of $450 million. He also has to pay $300 million in fines and had to surrender by June 9. The problem, though, as widely reported, is that he instead disappeared, with his car found near the Bear Mountain Bridge in New York. "Suicide Is Painless," the title to the "M*A*S*H" theme song, was scrawled across the hood in the dirt.
The U.S. Marshals Service, however, has decided to treat the situation as a "fugitive investigation," it says in a June 17 release. The wanted notice describes Israel as "a white male, 5-11, 200 pounds, with brown hair and eyes, and ... a tattoo of a bird on his left arm." It also notes he is addicted to painkillers and has a heart condition.
Then there was Lou Pearlman, former promoter of the Backstreet Boys and 'N Sync, sentenced May 21 to 25 years in prison for defrauding investors and banks out of more than $300 million. He admitted in a plea agreement to defrauding creditors through a shell company, bankrupt Trans Continental Airlines Inc., by presenting fake financial statements created by a phony accounting firm. Before he was caught last year, however, he hid out in Bali, where he was found at a hotel, registered under the dubious pseudonym "A. Incognito Johnson."
But before anyone was searching for Israel or Pearlman, there was Kirk Wright, the founder of hedge fund International Management Associates LLC, who evaded arrest for nearly three months in 2006 before being arrested that May at a Miami-area Ritz Carlton hotel. Wright had failed to comply with a state receivership order and allegedly defrauded investors in his firm's funds, including former National Football League players, by inflating asset and return figures. Wright was convicted this May of swindling some $150 million from investors and shortly afterward hanged himself with bed sheets in his Atlanta jail cell. A lawsuit brought by six former NFL players against the league's players association, however, continues. The NFLPA had Wright on a list of approved financial advisers.
Perhaps the dragnet for Israel should scour luxury hotels. - David Elman
