Bayou Group Founders Confess to Fraud; $350 Million Still Unaccounted For

Law360, New York (October 3, 2005, 12:00 AM EDT) -- The two founders of the hedge fund Bayou Group who absconded with $450 million in investments came out of hiding Thursday and pled guilty to fraud. Although investigators seized $100 million from the men, $350 million remains missing.

Former CEO Samuel Israel III, and former chief financial officer Daniel Marino confessed to multiple counts of fraud, including investment adviser fraud, mail fraud, and conspiracy.

Both Israel and Marino were released until sentencing and given two weeks to raise $500,000 in bail.

Each count carries a penalty...
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