These seemingly conflicting clues reflect the bizarre trajectory of Mr. Israel’s life, beginning as the scion of a New Orleans family and ending up the perpetrator of one of Wall Street’s biggest recent frauds, the 2005 collapse of his Bayou hedge fund. Now investigators think Mr. Israel may have tried one final hoax — his own death — and the United States Marshals Service has termed him “armed and dangerous” and issued a wanted poster.
No body has turned up, and the marshals on Thursday were said to have questioned a driver whose car was seen near the area where Mr. Israel had abandoned his GMC Envoy, leaving behind the car keys and a bottle of pills. In addition to the marshals, the Federal Bureau of Investigation and the United States attorney’s office, which oversaw the case, are involved in the search.
Former prosecutors and other law enforcement officials say that along with monitoring airports and border crossings, the police check credit cards and cellphones for any activity in fugitive cases. They also track the phones of friends, family, and in some cases even lawyers.
If Mr. Israel, 48, is indeed on the run, he will have added a whole new cast to the list of people he fooled while seeming to be a skilled money manager, including his lawyers, his girlfriend and even his family rabbi.
In a presentencing memorandum to Judge Colleen A. McMahon of Federal District Court, Mr. Israel’s lawyers assured the court that “there is no question that Sam is neither a flight risk nor a danger to the community.”
What is more, they said that Mr. Israel should be allowed to report voluntarily to prison on June 9 because of a long history of back pain and other medical problems. Mr. Israel, who has a pacemaker as well as another implanted device that emits electrical currents to ease pain, was scheduled for a spinal operation before he disappeared.
Mr. Israel’s lead lawyer, Lawrence S. Bader, declined to comment.
Mr. Israel’s girlfriend, Debbie Ryan, told investigators she last saw him when he left their Armonk home at 9:30 Monday morning, telling her he was on his way to report to a federal prison in Ayer, Mass., according to the state police.
The GMC Envoy was found about three hours later on a shoulder along the Bear Mountain Bridge, and the police say they were initially puzzled at the idea that Mr. Israel would drive his own car alone to prison. And they recognized “Suicide Is Painless” as the theme song from the TV show “M*A*S*H.”
If he did flee, another mystery is why Mr. Israel waited until the day he was to report to prison. Mr. Israel was sentenced in April, and individuals knowledgeable about the case say he has spent recent months receiving medical care and cooperating with investigators seeking to recover money on behalf of his former investors.
The contradictions do not end there.
In the same April 9 letter to Judge McMahon where he speaks of suicide, Mr. Israel said he had become increasingly desperate as Bayou’s losses mounted. But “when what I perceived as divine intervention occurred in the form of the fictitious investment programs, I leapt at the opportunity,” he wrote.
Mr. Israel makes other puzzling personal revelations in the letter. Although the Israel family is prominent in the Jewish community in New Orleans — Mr. Israel’s father was recently honored by a local hospital for his philanthropic work and their rabbi also submitted a letter of support to the judge — Mr. Israel wrote that he has “always been a person of Christian faith, but through my saturating guilt and profound shame, I have reassessed what it means to be a Christian.”
Hearing of Mr. Israel’s spiritual turn, David S. Goldstein, emeritus rabbi of the Touro Synagogue in New Orleans, said, “You could knock me over with a feather.” He described Mr. Israel’s parents, Ann and Larry, “as greatly anguished over these events. The Israel name is one of distinction in this community, and that’s part of the embarrassment and the hurt.”
Indeed, Mr. Israel wrote that the pressure to live up to his family’s legacy was a reason for the fraud. “Ever since I can remember, I met people everywhere that have told me they know my family either directly or by reputation,” he wrote. “I cheated my investors because I was afraid to admit my failure. I did not want the world to think I was not good enough and I did not want my family to see me as a failure.”
Older Wall Street types still remember Mr. Israel’s grandfather and namesake, Samuel Israel, who built what had been founded as a family company into ACLI International, a commodity trading powerhouse. It was sold to the firm of Donaldson, Lufkin & Jenrette for $42 million in 1981.
After studying at the private Hackley School in Tarrytown, N.Y., and then Tulane University, Mr. Israel headed to Wall Street in 1982, working for various firms during the 1980s and early 1990s, including Omega Partners, the multibillion-dollar hedge fund headed by Leon Cooperman.
When he established Bayou in 1995, former colleagues and others say Mr. Israel repeatedly inflated his résumé and exaggerated his role at Omega. Ira Harris, a longtime Wall Street banker and investment adviser, says he briefly looked at Bayou but was quickly dissuaded by Mr. Cooperman. Mr. Cooperman said he did not want to discuss Mr. Israel’s brief tenure at Omega.
“It was obvious from talking to Leon Cooperman that this individual was not who he said he was,” Mr. Harris recalls. “If the first thing the guy is lying about is his résumé, why would you want to go further?”
Nevertheless, Mr. Israel and two associates, Daniel Marino and James Marquez, managed to gather more than $400 million before investors began to demand their money back and Bayou abruptly collapsed in the summer of 2005. Mr. Marino is now in prison appealing a 20-year sentence, while Mr. Marquez is serving a shorter 51-month term.
During Bayou’s heyday, Mr. Israel oversaw a high-tech trading floor, which featured pet snakes encased in aquariums, while he rented a $32,000-a-month mansion in Mount Kisco from Donald J. Trump. After the collapse of Bayou and his guilty plea in September 2005, Mr. Israel moved to a modest house in Armonk.
The shades on the olive green ranch home that Mr. Israel shared with Ms. Ryan were drawn tight late last week. Several knocks on the front door went unanswered. Ms. Ryan was unavailable for comment. Mr. Israel, who is divorced, has a teenage son and daughter.
Darci DiBari , who lives across the street, said the couple had lived there, on the shady hillside lot just off Route 22 in Armonk, for about 18 months.
“I’d see him occasionally, outside taking a walk,” Ms. DiBari said, adding that Ms. Ryan was often seen walking her dogs. “They were nice, no trouble. It’s a hi and goodbye neighborhood. People kind of keep to themselves.”
Mr. Israel was to report to Federal Medical Center Devens, which holds inmates requiring long-term medical or mental health care. The compound, west of Boston, includes a hospital with inpatient beds and 24-hour nursing care.
Most of the 1,007 male inmates, who range from low- to high-security, live in double-occupancy cells and work seven and a half hours a day, performing tasks like cleaning the showers, according to Mike Truman, a spokesman for the Federal Bureau of Prisons.
While the police keep an eye on the Hudson River as well as airports and borders for any sign of Mr. Israel, former victims say they are convinced he is on the run.
“Knowing Mr. Israel, he probably faked this,” said Samuel Christen, who invested about $825,000 in the Bayou Group in 2003. “Everything about him was phony.”
Stacey Stowe contributed reporting.