Money | hedge fund Hedge Fund Fraud Gets 20 Years Samuel Israel denied leniency in $400M investor 'ponzi scheme' By Nick McMaster Posted Apr 14, 2008 4:45 PM CDT Copied Samuel Israel III, right, arrives at the United States Courthouse in New York, Monday, April 14, 2008. (AP Photo/Craig Ruttle) The founder of defunct hedge fund Bayou Group was given a 20-year prison term today for bilking investors out of more than $400 million, Bloomberg reports. Samuel Israel must also pay $300 million in restitution for masterminding a “ponzi scheme” in which investment returns were paid with new investors’ money. His sentence is the longest for a white-collar crime since Enron litigation. "You were, in every meaning of the sense, a career criminal … you ruined lives," US District Judge Colleen McMahon told Israel at sentencing. "Financial fraud, white-collar crimes are every bit as heinous as every other type of crime and they will be punished severely." Read These Next 11 people hurt in a "brutal act of violence" in Michigan. We knew Letterman would pipe up about Colbert eventually. A parent's nightmare, in a white cardboard box. The humans survived this flight; the deer on the ground didn't. Report an error