He’s sorry all right.
Sam Israel, the hedge-fund manager convicted of running a $450 million Ponzi scheme who faked his own suicide to avoid the slammer, apologized for dragging the industry through the mud.
“I am deeply ashamed to have disgraced you all by proxy,” Israel told roughly 150 members of the New York Hedge Fund Roundtable in a letter last week. “I am sorry to have tarnished the business I loved and lived for my entire life.”
Israel’s message, dripping with self-pity and regret, was delivered at the end of a presentation last Monday at the posh Princeton Club in Midtown, where hedge fund pros had convened to hear from Guy Lawson, the author of a new book on the financial felon.
Tim Selby, president of the group, said the message from Israel — whose fraud rocked the industry in 2005 — silenced the room.
“Everyone sat on the edge on their seats” when Lawson said he would read remarks prepared by Israel, Selby said.
Israel was sentenced to 20 years in 2008 after he pleaded guilty to cheating investors, including pension funds, in his Bayou Hedge Fund Group. He was sentenced to an additional two years after he faked his own suicide in a bid to avoid reporting to prison.
The former hedgie, 53, is in federal lockup in Butner, NC, where Ponzi king Bernie Madoff is serving 150 years. Israel is scheduled for release in 2027.
In 2005, before Madoff’s $20 billion fraud took the crown, Bayou’s collapse rattled the industry, forcing changes in due diligence and supervision.
In his note, Israel warned his former peers against taking the “easier path” — lest they end up like him.
“The price is dear, as I found out. Nothing is worth this. Not the embarrassment, disappointment, failure — nothing,” he wrote.