Long Sentence for Investor Fraud
Federal judge Colleen McMahon handed down a severe sentence to Samuel Israel III, co-founder of the hedge fund, the Bayou Group, for his role in a scheme to cheat investors. The judge sentenced Israel to 20 years in prison for a fraudulent scheme involving more than $400 million. The sentence was among the longest handed down in a white-collar case though Israel had pleaded guilty.
In sentencing Israel to 20 years, Judge McMahon noted that the Federal Sentencing Guidelines advised a sentence of more than 30 years in prison. The judge cited Israel's cooperation with prosecutors as one of the factors mitigating his sentence.
Daniel Marquez, the other co-founder, was found to be less culpable and was sentence to just four years and three months.