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.

At Israel's sentencing in New York, U.S. District Judge Colleen McMahon said, "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."

Lawyers for Israel had sought leniency, noting he has had numerous back operations and is addicted to painkillers.

The judge had no compassion in her voice when she said, "He suffered from these ailments while he did the crime. He can deal with them while he does the time."

Last month, authorities arrested Israel's live-in girlfriend for allegedly helping Israel fake his suicide and assisting him in his getaway. A criminal complaint filed against Debra Ryan alleges 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.

One of the items Ryan allegedly helped pack is a motor scooter. Southwick police told ABC News that Israel arrived at the police department on a scooter before he turned himself in.

The FBI and U.S. Marshals are examining the RV, which Israel is believed to have used since he has been on the run. The RV was found in Granville, Mass., seven miles west of Southwick. Police said he had been staying at an RV park.

The court documents also claim Ryan helped Israel set up the staged suicide scene. Authorities had found Israel's abandoned car near the Bear Mountain Bridge over the Hudson River in New York. On the hood of his car, written in dust, was the message "Suicide is Painless," the name of the theme song of the movie and TV series "M.A.S.H."

Ryan was released on bond, but she is under pre-trial supervision and is not allowed to travel outside a limited area in New York and Connecticut. She could face up to 10 years in prison if convicted of aiding and abetting Israel.

A U.S. Marshals official said that in conversations with his family, Israel had expressed concern about the charges against his girlfriend. According to the official, Israel made one request of the Southwick police: "Could you please ask the Marshals Service and the FBI to drop the charges against my girlfriend?"

Authorities say they have linked another friend of Israel's to the scene, but that man has not been charged with any crime.

U.S. Marshals will likely transfer Israel to a federal detention center in Massachusetts. The Devens Federal Medical Center, 20 miles north of Worcester, Mass., is one facility under consideration, given Israel's medical issues. Israel also might be brought to a New York federal detention facility to face new charges in the Southern District of New York, officials said.

ABC News' Anne-Marie Dorning contributed to this report.