Hedge Fund Cheat Israel Surrenders in Mass.

July 2, 2008— -- A fugitive hedge fund trader who allegedly faked his own suicide to avoid prison time surrendered to authorities in Massachusetts this morning, law enforcement officials tell ABC News.

Sam Israel III pleaded guilty to fraud and conspiracy charges in September 2005, and a federal judge sentenced him to 20 years in prison for the crimes on April 14 of this year. At his sentencing hearing, Israel was released on his own recognizance, and the court ordered him to report to prison June 9.

Instead, he allegedly faked his suicide by staging a bridge jump to avoid starting his sentence.

Southwick, Mass., Police Chief Mark Krynicki, who said he recognized Israel from a recent feature on "America's Most Wanted," told ABC News that Israel walked into the city's police station at 9:15 a.m. today and turned himself in to Officer Paul Miles.

A law enforcement official told ABC News that Israel said, "My name is Sam Israel. I'm wanted by the Marshals Service." Authorities said he appeared to be in good health.

Miles described Israel to ABC News as a "very polite gentleman who wanted to surrender."

Around noon, U.S. Marshals based in Springfield, Mass., picked Israel up from the Southwick Police. According to the complaint issued by the U.S. Attorney's office he was scheduled to appear in court at 3 p.m. in front of U.S. District Judge Michael Ponsor.

According to law enforcement officials, Israel had recently been in telephone contact with family members, including his mother, who lives in the Chicago area. It was through those conversations, officials say, that Israel was eventually "talked in" and decided to surrender.

Israel had defrauded investors in the Bayou Hedge Fund out of approximately $450 million in a Ponzi-type scheme that claimed cash coming into the fund from investors was profit from earlier investments.

The fund lost an estimated $300 million. As part of the sentence, the judge ordered Israel to pay the same amount in restitution.