Federal prosecutors filed a civil suit yesterday alleging
that Bayou Management committed a massive fraud, using a phony
auditor to overstate its investment performance and its assets
for the last seven years.
The suit, filed by U.S. Attorney for Manhattan David N.
Kelley in the Southern District of New York, seeks the
forfeiture of all of Bayou's assets, including $100 million
seized by the state of Arizona in May.
Bayou founder Samuel Israel III...