Cityfile: New York's Most Notable and Influential

Fraudster Auto Auction a Success | A New Jersey neurosurgeon named Gregory Przybylski is the proud new owner of Bernie Madoff's Mercedes station wagon. The fun-loving doc scooped up the vehicle (which he says is "a part of history") for $14,250 at a government auction last Friday. Meanwhile, the RV that once belonged to fraudster Sam Israel was auctioned off as well, selling to a Brooklyn car dealer for $27,500. [NYP]

Scammer Special | A 2001 Mercedes-Benz E320 that used to be the property of Bernie Madoff (before the US Marshals Service came along and confiscated the keys, naturally) is going up for auction on October 23. It's a Ponzi scheme double-header, actually. Also on the block will be the RV that once belonged to imprisoned hedge fund manager/scam artist Samuel Israel and served as his escape vehicle, no less. [Dealbreaker]

A CBS News camera crew caught up with Mark Madoff on the streets of Soho yesterday! Bernie's son refused to answer questions, which is hardly surprisingly. But his appearance spoke volumes. More

Two More Years For Sam Israel | Remember Sam Israel, the druggie hedge fund manager who made off with $450 million, got caught, and was sentenced to 20 years in prison—but then tried to skip out on the sentence by faking his own death? Hopefully the two weeks Israel spent lost in the woods was worth it! Because it just earned him another two years behind bars. [NYP]

Back before Bernie Madoff came along and hogged the spotlight, there was Samuel Israel, the hedge fund founder who ripped off investors to the tune of $450 million, got caught, tried to fake his own death, failed, turned himself in, and was ultimately sentenced to 20 years in prison for his crimes. His legal ordeal isn't over yet. Last Friday, the Second Circuit Court of Appeals ruled against him after he asked the court to reduce his sentence. Next month, additional time will be added to his sentence for that bail-jumping stunt that had him on the lam for three weeks last year. But Israel's tendency to vanish into thin air may be alive and well. More

• The Treasury Department announced a plan to save Citigroup from near-certain doom. The government will take a 36 percent stake in the company, three-quarters of the bank's shareholders will be wiped out, and the board will be overhauled. Vikram Pandit? He keeps his job. [WSJ, BN, NYT]
• New GDP figures indicate "the U.S. recession deepened a lot more in late 2008 than first reported." The figures haven't been this bad since '82. [WSJ]
• Stocks tumbled this morning on the Citigroup and GDP news. [BN]
• Andrew Cuomo has subpoenaed Bank of America seeking the names of the Merrill execs who received $3.6 billion in bonuses. This comes after BofA CEO Ken Lewis failed to provide the details during his deposition yesterday. [DB]
• A "mutiny is brewing" within UBS's investment banking unit following the ouster of the bank's CEO, Marcel Rohner. [NYP]
• Blackstone reported a fourth-quarter loss of $827.1 million. [BN]
• Bernie Madoff moved $164 million from London to New York in the weeks before he was busted, according to new court documents. [NYP]
• Scammer Sam Israel has moved from a prison hospital back to prison. [AP]

Sam Israel Avoids Prison Once Again | Former hedge fund manager Sam Israel sure has a talent for putting off the inevitable. The former financier faked his own death to avoid jail time back in June, then got a judge to postpone his sentencing twice so he could get treatment for his addiction to methadone in August and September. Now a judge has delayed his sentencing yet again so he can undergo a 90-day medical evaluation in North Carolina. His next court date isn't scheduled until February 2009. [Bloomberg via Dealbreaker]

Samuel Israel: Drugs and Court Don't Mix | Disgraced hedge fund manager Samuel Israel III turned up to court yesterday to face new charges in connection with faking his own suicide last month. The judge didn't accept Israel's plea of guilty to bail jumping, though. When the bearded hedgie told the judge that he was being "weaned" off the painkiller fentanyl with methadone and rated his "clear-mindedness" at "about 70 percent," the judge postponed the matter until September 16. In the meantime, you can have a look at the criminal indictment below. [NYT]More

• Merrill Lynch's $4.65 billion second-quarter loss was almost twice what analysts had predicted; the firm also wrote down an additional $9.5 billion in connection with subprime losses. [Bloomberg]
• Citigroup's posted a better-than-expected loss of $2.5 billion for the quarter, which Vikram Pandit is spinning as progress since the bank lost $5.1 billion last quarter. [NYT]
• Troubled mortgage financing giant Freddie Mac is weighing selling up to $10 billion in new shares to raise capital. [WSJ]
• AMD president and COO Dirk Meyer will succeed Hector Ruiz as the chip maker's CEO. [WSJ]
• Both Google and Microsoft issued rare disappointing earnings. [Bloomberg]
• Investors swindled by Samuel Israel III's Bayou Group are trying to recoup their losses from Goldman Sachs, Bayou's prime broker. [NYT]
• Teva is acquiring rival Barr Pharmaceuticals in a $7.46 billion deal. [WSJ]

Bear Stearns execs Ralph Cioffi and Matthew Tannin were led off in handcuffs a couple of weeks ago, accused of deceiving investors in one of the firm's ill-fated hedge funds. Bayou Group founder Samuel Israel III turned himself in last week after spending a few weeks on the run, and has started a 20-year sentence for defrauding investors of $450 million. (He now faces an additional 10 years for bail-jumping.) Plenty of other financial big wigs may ultimately get caught up in criminal probes, making 2008 one of the busiest years for white-collar defense lawyers, at least since the Drexel Burnham boys headed to the clink in the early '90s. A word of caution, though, to high-finance criminals facing the prospect of time behind bars. You do not want to show up to prison totally unprepared a la Sherman McCoy in Bonfire of the Vanities. Certain matters should be taken into account before you head off to the clink. There are even ways to parlay your riches and master-of-the-universe shtick into preferential treatment! Tips for disgraced Wall Streeters on how to survive behind bars after the jump.More

Sam Israel Appears in Court | Disgraced hedge funder Sam Israel went before a federal judge in lower Manhattan this morning after surrendering to the police yesterday. So what did he have to say for himself? Israel claims he tried to kill himself while on the run by swallowing 175 tablets of morphine and then eating the Fentanyl patches he had with him. And we just thought he spent the past two weeks working on the perfect fugitive beard. [NYDN]

Sam Israel... Caught! | "The fugitive hedge fund swindler Samuel Israel III surrendered to law enforcement officials on Wednesday, ending a manhunt that began shortly after he faked his suicide on the day that he was to report to prison... He was talking to his mother on the phone when he walked into a local jail and surrendered to the United States Marshals task force, a spokeswoman for the marshals said." [NYT]

It's been three days since the Feds concluded that hedge fund scam artist Sam Israel did not, in fact, kill himself, but just staged his suicide the day he was expected to turn himself in and begin serving a 20-year sentence. Where he is at the moment no one knows (we've had some theories). One idea we didn't consider: That Sam managed to travel to a different dimension:

A trader who worked with him in the mid-'90s says Israel believed in time travel. "This guy Sam was crazy, and told people he was actually working on a time machine for the government," said our source. "He brought two of my friends from Wall Street into his basement and showed them some contraption. Now that's a nut case."

One person you do not want to be right now is disgraced hedge funder Samuel Israel III. Because if you were him you'd either be a) lifelessly floating along the banks of the Hudson River; or b) the subject of one of the most high-profile manhunts in white-collar criminal history. Or both! Israel, the Bayou Group hedge fund founder who was found guilty of conning investors out of millions of dollars, was scheduled to begin serving a 20-year prison sentence on Monday; just an hour before he was scheduled to show, his car was found on the Bear Mountain Bridge with the words "Suicide is Painless" drawn in dust on its hood. But no body has turned up. And it turns out that people tend not to believe you when you spend your entire career defrauding people. More