Charity Says It Was Bayou Fund Victim

Federal prosecutors allege that Bayou, almost from the day it opened in 1997, was a fraud. Prosecutors contend Israel and his associates made a variety of false statements over the years to induce investors to sink their money into Bayou and remain in the fund, even though they had the option of withdrawing at the end of each month.

The Jewish Federation, in its lawsuit, says it began investing in Bayou in March 2004, with an initial investment of $2 million. Four months later, the organization invested an additional $2 million.

The organization says it had no reason to believe its investment was in jeopardy because Bayou sent it eight monthly statements that "purported to show a consistent growth'' in value. Beginning in April 2005, the monthly gains stopped, but Bayou kept reporting no change in the value of the Jewish Federation's investment.

In July, Israel notified all of Bayou's investors that the fund would be shut down and they would soon get all of their investment. But no investor has received any money to date.

Other investor lawsuits are in the works.

Ross Intelisano, who represents eight investors with between $10 million to $12 million in losses, says he is continuing to investigate the apparent fraud. He says, "Once we have obtained all the necessary information, we will decide when and where to file a claim.''