Israel was the CEO of his own company - the Bayou Hedge Group - which managed to raised $450 million dollars from investors after its formation in 1996.
After forming the company, Israel started taking this money for his own personal use, creating a Ponzi scheme.
Poor returns in 1998 led to the company founding a fake accounting firm, which it used to audit itself to keep up the appearance of success to its investors.
Jail sentences
In 2005, Israel was indicted.
In September of that year, the Commodity Futures Trading Commission (CTFC) filed charges against Israel and the Bayoux CFO Daniel Marino.
The following year, the hedge fund filed for bankruptcy.
Israel was sentenced to 20 years in prison and ordered to forfeit $300 million after he admitted defrauding investors.