Bayou CFO gets 20 years in prison

Daniel Marino, the ex-chief financial officer of hedge fund Bayou Group LLC, was sentenced to 20 years in jail yesterday for defrauding investors, according to published reports. The second defendant to be sentenced in the case, Mr. Marino pleaded guilty in September 2005 to conspiracy and three counts of fraud. The Stamford, Conn.-based company, which once managed more than $400 million in assets, fell apart in 2005 following the discovery of multiple frauds by its managers. The company filed for bankruptcy in May 2006, leading to lawsuits that claimed it operated a Ponzi scheme. Mr. Marino, who faced a maximum sentence of 50 years, had sought leniency due to his cooperation with prosecutors, according to a report in The New York Post. U.S. District Judge Colleen McMahon ordered him to begin serving the prison sentence immediately. Mr. Marino will pay restitution to be determined at a later date, the judge said. The restitution would likely be at $200 million, she said. The fund's two founders — Samuel Israel III and James Marquez — have also pleaded guilty. Mr. Marquez was sentenced last week to 51 months in jail and was ordered to pay $6.25 million in restitution. Mr. Israel is awaiting sentencing.