Last week the SEC settled a securities fraud case with one Ziad K. Abdelnour, CEO of Blackhawk Partners, for a $25,000 fine and a five-year ban from the securities industry. The fraud was not exactly hard to recognize: anyone who, while claiming to represent “a purported private equity ‘family office,’ solicited investors to invest in trading programs that purportedly yielded returns of up to 600% in as little as seven days, with no risk,” is overcompensating. (For: fraud.)
But Abdelnour’s fraud was even more obvious; he basically said right on his website – under the bold heading “WARNING ON SCAMS” – that what he was selling was a scam. As the SEC puts it, his “website also discouraged prospective investors from heeding Commission and FBI warnings about private placement programs, stating:”1
WARNING ON SCAMS
It is very common to find on the internet so many web-sites, or message boards/links to so-called official documents, or reports of the “Financial Authorities” warning the public that this business ‘does not exist’ and any of these offers are always scams. The reports in question could have been written by the SEC, FBI, ICC or any of the regulatory authorities. . . . You should all understand that most people that work at banks, securities houses, accountant firms, etc., have no insight into this kind of trading, and they are very eager to listen and comply with everything by the authorities. So if SEC, FBI and others say that this is all a scam, then they believe so.
For all you nay-Sayers and disbelievers out there who are looking for evidence that this kind of trading exist[s]; try to learn and understand monetary history and banking and you will understand that this can, in fact, work- in theory. You don’t have to run around and try to find evidence, because unless you have USD10M to test it for yourself, then you need to rely upon others who are vouching. So we suggest that you find out the truth yourself, without listening to what others are saying.
Who are you going to believe: an SEC/FBI fraud warning, or some guy asking you to trust him with $10 million? The choice is clear. Read more »
Remember Debra Ryan? For those who need a refresher, she was the woman behind the man that was Sam Israel III, the hedge fund manager who, with the help of DR, faked his own death in 2008 to avoid the prison time that was coming his way as a result of scamming investors in the Bayou Group out of $450 million. Several months after Israel was caught, Ryan penned an article for Marie Claire, explaining that she’d gone to great, illegal lengths to help him stay out of the big house because of the “blazing sex life” they had, which she wasn’t prepared to give up to the penitentiary system. Though she was still clearly not ready to move on (“I should just see it at face value and say he [screwed] me,” she noted. “But I can’t let go”) one would have thought that time and the three years probation Ryan was sentenced to would have helped her get over the guy who used to sneak up on her “while wearing glasses on his penis.” Apparently, though, such is not the case, as evidenced by Debra’s contribution to a new book about Israel by Guy Lawson called Octopus, in which we learn that she continues to carry a torch for Israel that burns nearly hot as the fire in both their loins. Read more »
Remember Samuel Israel III? For those with short memories, SI3 is a former hedge fund manager who faked his own death in June 2008 with the help of his girlfriend, Debra Ryan, who later wrote an article explaining her actions by noting that she and Israel had “a blazing sex life” that was hard to walk away from (Ryan shared colorful anecdotes that included all the times Israel would “[jokingly] sneak up on her, once while wearing sunglasses on his penis”). For Israel’s part, he had pretended to kill himself, incorporating a line from M*A*S*H into his fake suicide note, in an attempt to avoid the prison stay that was coming his way, on account of having taken Bayou Group investors for more than $450 million. At the time, he became something of a minor celebrity, whose business card, prominently featuring an egret, was auctioned off on eBay but since ultimately being sentenced to twenty years behind bars we’d heard nary a peep from the guy. Luckily, Andrew Ross Sorkin recently flew down to Butner, North Carolina for a little chat and it’s a good thing he did because Israel had a lot he wanted to get off his chest.
After offering ARS an “orange Life Saver,” discussing his own version of a playoffs beard (“Mr. Israel…was wearing a tan prison uniform with his hair grown out, a mass of silver and brown curls sprouting from the sides of his bald head. ‘I’m never going to cut it until I get out,’ he exclaimed”), and talking Ponzi schemes, SI3 got down to the real matter at hand. Read more »
Listen, I know Federal District Court Judge Kenneth Karas *had* to inquire as to whether or not Sam Israel was sane enough to enter into a guilty plea for bail jumping in June because he didn’t want to go to prison but come on, buddy. WAKE UP. You are getting played by a man who fucks egrets.* Hasn’t EB already proved himself to be someone who can’t be trusted to tell the truth? Or is the whole, defrauding of clients, faking his own suicide stuff water under the bridge?
Karas asked Israel yesterday to rank his clear-mindedness on a scale of 1 to 100 (which, since we’re nitpicking the legal system, also seems ridiculous. Should be a yes or no question. Are you crazy? Yes or no. None of this on a scale of bat-shit insane to completely lucid, where do you stand business, because where do you draw the line? Can you send someone to jail who’s “Not nuts but definitely cripplingly neurotic”? Do you put your foot down at “I’ve had many a sleepless night trying to figure out who was behind the premeditated destruction of Corey Haim’s career”?). Israel thought about it for a few seconds and answered, “About 70 percent,” to which Karas responded, “Seventy percent is not a number that makes me feel comfortable” and delayed the hearing to September 16, giving Egret Boy exactly what he wanted–yet another chance to escape, and, should he screw that up again, ample time to research whether or not conjugal visits necessarily have to be human on human.
Judge Delays Hearing for Fund Manager Who Fled [AP]
Former hedge fund manager-cum-performance artist Samuel Israel III who faked his own death this summer because he didn’t want to go to jail is set to plead guilty to bail-jumping this afternoon. The industry’s biggest M*A*S*H fan and only (known) egret lover waived an indictment on a charge of failure to surrender for his prison sentence before U.S. Magistrate Judge Lisa Margaret Smith this morning, but the formal plea must be entered before U.S. District Court Kenneth Karas later today. And I think we all know what that means but for the non-ambitious ones in the group, I’ll tell you what it means: there’s still time for him to make a run for it.
Ex-hedge fund manager to plead guilty to bail-jumping [Reuters]
This is the one we’ve been waiting for, people. Manhattan Federal Judge Colleen McMahon, none too pleased with the stunts pulled by Sam Israel, is taking away his toys. McMahon signed a preliminary agreement yesterday demanding the industry’s biggest M*A*S*H fan hand over the scooter he tooled around on after faking his death, the RV he was hiding out in, a Tiffany watch and the $932 that was in his pocket when he was arrested on July 2 in Southwick, Massachusetts. Here’s where we come in: all the items are being sold, with any profits– and if I know the DealBreaker audience and its sick fetishes, there will be many– going toward the $150 million Israel owes in restitution. We’ll post more information about the sale as soon as it’s available, and, in the meantime, pray to God authorities will recover the love tokens Israel had stashed around his apartment in anticipation of his reunion with the egret, and the condom they used on their last night together (just kidding– Israel convinced her to go without, noting that any man-bird that came of it was meant to be).
Wall St. Swindler Loses Scooter [NYDN]
This is fantastically rich(er than the now destitute Bayou Group investors Sam Israel screwed back in the day): in 2004, desperate to raise money to save his fund, the industry’s biggest M*A*S*H fan turned to a man named Robert Booth Nichols for help in the dollars and cents department, and was himself conned out of $10 million.
According to Bloomberg, Nichols cheated Israel in a “prime bank” fraud, promising Egret Boy “quick riches in secret markets” that did not in fact exist. Now a not yet on the lam Nichols is being sued. The original Con Man, who denies any wrongdoing, claims that he was helping Israel invest in a “legitimate, though unspecified ‘project’ involving U.S. government obligations,” and had “no reason to believe Israel was engaging in fraud.”
Not saying Nichols isn’t full of shit but, as you may recall, Sam Israel is said to have believed in time travel, and before the hours got crazy over at his Ponzi-scheme, spent nights and weekends building a Delorean in his basement, which he at one point claimed to have been working on for the government. Oh, and Nichols also says that his services, which “involved matters of national interest,” had been given the okay John P. Ellis, “a first cousin of President Bush.”
So anyway…if your brain hasn’t yet exploded, take some time this afternoon to try and dig up Nichols’s business card. It has got to be as least as valuable as Israel’s, and if the stories that Con Man #1 liked to get even friskier when it came to a love of plumage that dared not speak its name and their subsequent renderings on his b-card than #2, perhaps more so.
Bayou’s Israel Was Cheated in Scam, Investigator Says [Bloomberg]
He grew the beard for the egret and the verdict? The egret likes. [NYT]
CNBC reports that Sam Israel III, the convicted former hedge fund manager who no one believed committed suicide after he failed to show up to start serving a 20-year sentence for defrauding clients of a bunch o’ money, has been taken into custody in Southwick, Massachusetts. The industry’s biggest M*A*S*H fan apparently surrendered himself to authorities at 9:30 this morning. Finally, we’re going to find out if the unknown tattoo on the Bayou Group founder’s hip is a. two egrets having sex b. two egrets having a type of sex that is illegal in 38 states or c. a depiction of interspecies sex between a human and a bird (participants: Sam Israel and egret). While we wait for more info to come out, someone riddle me this: do conjugal visits have to be between one human and another or are the rules flex enough to include feathered friends? Interested parties would like to know.
It’s going to be a great day and let me tell you why: Page Six reports that not-dead former hedge fund manager Samuel Israel believed in time travel and before the hours got crazy over at his Ponzi-scheme, spent nights and weekends building his very own Delorean. According to a trader who worked with Israel in the mid-90′s, Sammy-boy “brought two of my friends from Wall Street into his basement and showed them the contraption [which he said he working on for the government].” We’re not even going to run a poll asking you to pinpoint exactly where the industry’s biggest M*A*S*H fan shipped off to, because it’s patently obvious. A time and place where the interspecies love between a man and an egret is accepted.
Fled To Past [NYP]