While U.S. marshals were hunting down convicted hedge fund fraudster Samuel Israel III, their agency was busy recovering most of his firm's remaining assets.
While U.S. marshals were hunting down convicted hedge fund fraudster Samuel Israel III, their agency was busy recovering most of his firm's remaining assets.
In one of its lesser-known roles, the U.S. Marshals Service helped recover $115 million by selling Stamford, Conn.-based Bayou Group LLC's failed investments.
Most of the assets, which included stocks and bonds, were liquidated by Kroll Inc. of New York and passed along to the victims, said David Turner, spokesman for the Marshals Service.
“We expect to see more of these victim-identified cases in the federal courts,” he said.
“We will be directing these cash and stock holdings, maximizing their value and we want to try to keep the value of the portfolios up while we are waiting for the seized status to change to a forfeited status.”
Mr. Israel, the founder of the Bayou Group hedge fund, surrendered to police in Southwick, Mass., July 2 after faking suicide and going on the lam for 23 days.
He pleaded guilty in September 2005 to charges of conspiracy and fraud in a scheme to cheat Bayou Group investors out of $450 million and has been ordered to pay $300 million to his victims.
The Washington-based U.S. Marshals Service specializes in guarding the courts, running the federal witness protection program, catching escaped felons and disposing of seized property, with the proceeds going to crime victims.
