Disgraced (But Not Dead) Hedge Fund Trader Admits He Faked Suicide to Evade the Law

Last month, authorities arrested Israel's live-in girlfriend for allegedly assisting Israel in his getaway. A criminal complaint filed against Debra Ryan alleged that she repeatedly denied any knowledge of Israel's whereabouts, but then told federal investigators in a June 19 interview that she had helped the financier pack up an RV the day before he was supposed to report to prison.

Haggard-looking this morning when he arrived in the federal court house in suburban White Plains, Israel smiled and waved to a federal prosecutor and then announced his intention to plead guilty. Clad in brown prison garb, Israel made his initial appearance in U.S. District Court before U.S. Magistrate Judge Lisa Margaret Smith. She rejected his plea on technical grounds.

A former Armonk, New York resident, Israel's fund at had never been profitable. But Israel and his fellow executives managed to conceal that from investors. In the aftermath of Bayou's collapse authorities have labeled the company's funds a $450 million Ponzi scheme.

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