Bayou fund swindler to go to medical prison

NEW YORK, Oct 28 (Reuters) - Hedge fund swindler Samuel Israel, facing a bail-jumping charge for staging his own suicide in June to avoid reporting to prison, will spend 90 days in a medical prison, a spokesman for the prosecutor said on Tuesday.

At a hearing in U.S. District Court in White Plains, New York, Israel's lawyer made the request for the former head of the collapsed Bayou hedge fund group to be physically and psychologically evaluated at the prison in Butner, North Carolina.

Prosecutor Sarah Krissoff agreed to the request, and U.S. District Judge Kenneth Karas scheduled the next hearing for Feb. 27, 2009, according to Herbert Hadad, spokesman for the U.S. Attorney's Office for the Southern District of New York.

Israel's attorney, Barry Bohrer, was not immediately available for comment.

Israel, 49, has been in custody in New York since surrendering to authorities in July after a month on the run. Israel was sentenced in April to 20 years in prison for engineering a brazen scam that cheated investors out of about $450 million.

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 no body was found, police quickly labeled him a fugitive.

On June 19, authorities arrested his girlfriend, Debra Ryan, on charges of helping to stage his suicide.

Israel had been scheduled to enter a plea on the bail jumping charge, but hearings have been adjourned or postponed several times.

In August, Israel told Karas that he wanted to plead guilty to the bail-jumping charge, which could add as much as 10 years to his 20-year prison sentence for defrauding investors.

But the judge refused to accept the plea, saying he was concerned that medication the former investment manager was taking to wean him off painkillers could be clouding his judgment. (Reporting by Grant McCool; editing by Jeffrey Benkoe)