Sam Israel Surrenders, Fugitive Hedge Fund Chief In Custody

07/10/2008 05:12 am ET | Updated May 25, 2011

The Wall Street Journal and Associated Press report that fugitive hedge fund chief Samuel Israel III, who was suspected of faking his suicide on the day he was ordered to report to prison for fraud, has turned himself in.

From the AP:

Rebekah Carmichael, a spokeswoman for U.S. Attorney Michael Garcia, said Wednesday that Israel is in federal custody. She would not immediately provide other details.

Israel disappeared last month on the day he was supposed to report to federal prison. Authorities found his car on a bridge over the Hudson River with the words "suicide is painless" scrawled in the dust on the hood.

He was sentenced to 20 years in prison for bilking investors out of $450 million in hedge funds.

Reuters reports that Israel's mother told U.S. Marshals he'd be turning himself in:

She had been in touch with her son for weeks and had urged him to give up, officials said.

"Sam Israel was in contact with his mother right before he came in and she called us to let us know," Dave Turner, the Marshals spokesman said. "He gave up because of the intense pressure of the manhunt," Turner added.

Until now, investigators seemed to have a few leads -- they arrested Israel's girlfriend, who admitted to helping him load up an RV with his belongings and a scooter, and they questioned a man thought to be a possible getaway driver for the convicted scammer.

U.S. Marshals had placed Israel on the wanted list with a description of his bird tattoo and various ailments, including a bad back and an addiction to painkillers, which would seem to make him an unlikely fugitive. They also wrote that he should be considered "armed and dangerous."

Meanwhile, an enterprising eBay user put one of Samuel Israel's business cards for sale online. It received 27 bids and ultimately sold for $61.

In a bizarre coincidence, Samuel Israel's lawyer, Robert G. Morvillo, represents another white-collar fugitive who fled to Namibia. The exectutive, Kobi Alexander, lives openly in Namibia now as the U.S. tries to bring him back to trial for charges relating to backdating stocks.

Morvillo insisted it was nothing more than a coincidence that he had two white-collar fugitive clients:

"First of all, you've got to understand these are fairly few and far between. So even if you have one or two that come within a close period of time over a 30-year career, every one is going to get a couple of these. It's just human nature and the judges understand that and they also understand that people on this side of the fence do everything they can to convince their clients that this is not a viable alternative and obviously we end up convincing 99 percent of our clients about that and one percent goes on their own, and that's what has happened here."

"Life as a fugitive from a U.S. court is usually a fairly miserable experience,'' he said. "You're ultimately always looking over your back. You're ultimately deprived of the normal contact with family with friends. You're ultimately deprived of an opportunity to earn money. You're ultimately deprived of an opportunity to go to nice places for the most part because there are extradition treaties between the U.S. and most places which people want to inhabit.''

See also: the Wall Street Journal's photo gallery of white-collar fugitives.