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A U.S. judge Wednesday barred the girlfriend of jailed hedge fund swindler Samuel Israel from having any contact with him because she has been charged with mailing him a magazine and $300 cash in prison.
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Samuel Israel,founder of Bayou hedge fund |
Judge Kenneth Karas of U.S. District Court in White Plains, New York, made the order at a hearing in which Israel's girlfriend, Debra Ryan, pleaded not guilty to helping Israel stage his suicide last June to avoid reporting to prison.
Israel, head of the collapsed Bayou hedge fund group, has been in custody since surrendering to authorities in July last year after a month on the run. Ryan was arrested on June 19, 2008, on a charge of assisting her boyfriend avoid prison, and was released on bail.
Israel was sentenced last April to 20 years in prison for engineering a scam that cheated investors out of about $450 million.
There is potentially positive news for Ryan, however. A source close to the case told CNBC that today's procedural hearing on the federal charge could lead to a plea at a February hearing.
Karas scheduled Feb. 10 for Ryan to appear in court again, said Herbert Hadad, spokesman for the U.S. attorney's office for the Southern District of New York.
Hadad said Karas revealed in court that Ryan was arrested on Jan. 9 by police in Westchester County, New York, "for introducing contraband into a federal prison.''
Ryan is accused of mailing a magazine containing three $100 bills to Israel in December and faces a maximum penalty of up to one year in jail on the charge, a misdemeanor. New York State prisioners are not allowed to have cash.
"The magazine was discovered by corrections officers during a screening of mail,'' O'Leary said.
Ryan is scheduled for a Jan. 29 hearing on the matter.
In June, after Israel failed to arrive at a Massachusetts prison, his car was found abandoned on a New York bridge with the words "suicide is painless'' scrawled in dust on the hood. But when no body was found, police quickly labeled him a fugitive. He turned himself in a month later.
More from CNBC.com:
Under court order, Israel is in a federal prison in Ayer, Massachusetts, for physical and psychological evaluation.
In August last year, a judge refused to accept Israel's plea of guilty to a charge of bail jumping, saying he was concerned that medication the former investment manager was taking to wean him off painkillers could be clouding his judgment.
- CNBC Assignment Editor Jim Forkin contributed to this report.
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