U.S. District Judge Colleen McMahon has now sentenced the founder of hedge fund Bayou Group, Samuel Israel, to 20 years in prison. Daniel Marino, the former finance chief was also sentenced to 20 years back in January.
The judge said of Israel at the sentencing, "You were, in every meaning of the sense, a career criminal, you ruined lives,...Financial fraud, white-collar crimes are every bit as heinous as every other type of crime and they will be punished severely."
Hedge fund founder Samuel Israel III and finance chief Daniel Marino pleaded guilty in 2005 to using fake results and a phony auditing firm. Investors lost approximately $400 million according to court papers, but the government put the loss at over $450 million.
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.
The co-founder James G. Marquez was also implicated in the conspiracy and was sentenced to 51 months in prison.