US News

SWINDLER’S SUICIDE MAY BE FAKE

A hedge-fund manager due to begin a 20-year prison stint for a $450 million fraud abandoned his SUV on a Hudson River bridge with “Suicide is Painless” written in dust on the hood – but authorities strongly suspect he tried to fake his death.

“We’re not searching [the river] because it’s widely presumed that he didn’t jump,” said a police source about Samuel Israel III, who was being sought by the FBI and US Marshals today.

The FBI believes Israel, 48, got into someone else’s car and was driven away from the Bear Mountain Bridge after leaving his 2006 GMC Envoy there Monday, said another law-enforcement source.

“There’s nothing to substantiate that he killed himself,” the source said.

Israel’s victims, who learned they had lost millions when his Bayou Group LLC hedge funds were exposed as a massive Ponzi scheme in 2005, also believe that the Armonk, NY, resident is alive.

“Unless they find a body, I think he’s on the lam,” said Ross Intelisano, a lawyer for investors who lost $25 million in the Stamford, Conn.-based funds.

“They think it’s a ruse,” said Intelisano of Israel’s car being found on the bridge, which is about 40 miles north of New York City and connects Westchester and Orange counties.

Jumping from the 156-foot-high span would have meant almost-certain death, but no witness saw Israel leap.

Charles Gradante, co-founder of Hennessee Group, a firm scammed by Bayou, said Israel is “a con artist and this could be his last greatest con.”

“If Sam was going to commit suicide he would take an overdose of sleeping pills. That’s the easy way to go,” Gradante said of Israel, who has a history of depression, an addiction to painkillers and wears a pacemaker.

Sources said Israel is believed to have stashed money around the world and may have bought a phony passport after surrendering his own in 2005.

He was out on bail, and had been due to surrender to Fort Devens federal prison in Ayer, Mass., by 2 p.m. yesterday. That morning, he said goodbye to his girlfriend at his Westchester home.

“He told her he was going to prison, but he never showed up,” said State Police Inspector Tim Miller.

Instead, Israel drove in the opposite direction, toward Bear Mountain Bridge, where he left his vehicle with the words “Suicide is Painless” scrawled by finger in dust on the hood. The phrase is the theme song for the hit movie and TV show “M*A*S*H.”

The words were surrounded by pine needles stuck to the hood.

“That should tell you something,” said a law-enforcement source, suggesting that the words were written someplace other than on the bridge. There are more than a dozen pine tree along Israel’s driveway, but none near the bridge.

In 2005, Israel’s co-conspirator, Bayou’s CFO Daniel Marino, wrote a six-page “suicide note and confession” that said, “If there is a hell I will be there for eternity.” But Marino – who is serving a 20-year sentence – never attempted suicide.

Cops found Israel’s SUV early yesterday afternoon, and began searching the Hudson River for his body with boats and helicopters.

But today, no such search was apparent.

“We’re investigating a possible suicide attempt,” said Miller of the State Police. “But if it is fake, the US Marshals are looking for him anyway.”

Miller refused to say what is seen on surveillance video that may have captured Israel on the bridge, but denied rumors that it shows the scamster getting in another car after leaving his own.

A woman believed to be Israel’s girlfriend, said at his house today, said, “He was distraught over what had happened to him . . . over getting 20 years.”

“He didn’t think he deserved that sentence,” she said. “Hopefully, they’ll find him, if he’s floating in a river or wherever.”

A few months after Bayou Group came crashing down in 2005, Israel and Marino pleaded guilty to conspiracy and fraud charges for the $450 million scam. Investors had been duped for years into believing the funds were making money – in truth they consistently lost money.

At Israel’s sentencing this past April, an angry Judge Colleen McMahon called him the scheme’s mastermind, and said, “People who commit crimes while wearing a tie do not get a break.”

Additional reporting by Larry Celona and Matthew Nestel

perry.chiaramonte@nypost.com