Oct. 28 (Bloomberg) -- A plea hearing for Samuel Israel, the convicted founder of hedge-fund firm Bayou Group LLC charged with bail jumping, was delayed until next year while he undergoes 90 days of medical and psychological evaluation, the U.S. said.

Israel, 49, is accused of faking his suicide and fleeing the day he was to begin a 20-year sentence for a federal conviction in a $400 million fraud. His last plea hearing on Sept. 16 was delayed so he could continue treatment for drug abuse.

``The judge ordered 90 days of medical evaluation rather than him pleading today,'' Herb Hadad, a spokesman for Manhattan U.S. Attorney Michael Garcia, said today.

Last month, U.S. District Judge Kenneth Karas in White Plains, New York, barred Israel from entering a plea for the second time. In August, the judge delayed the plea due to Israel's addiction to methadone. Israel said at the time his ability to understand the proceedings was ``60 to 70 percent.''

Israel will undergo evaluation at a medical facility at a federal prison complex in Butner, North Carolina, Hadad said. His next hearing is scheduled for Feb . 27 in White Plains.

Israel, who appeared today in White Plains federal court, had a bandage on his right hand, Hadad said. A defense lawyer said Israel had broken it, the spokesman said. Barry Bohrer, Israel's lawyer, didn't return an e-mail seeking comment.

Three Weeks

Israel surrendered to police in Southwick, Massachusetts, in July, three weeks after his car was found abandoned on an upstate New York bridge with the words ``suicide is painless'' traced on the windshield. He must forfeit his $500,000 bail and faces as much as 10 additional years in prison.

Israel pleaded guilty in 2005 after admitting he hid hundreds of millions of dollars in losses at Stamford, Connecticut-based Bayou. Within a week of his disappearance June 9, when he was to report to the Fort Devens federal prison in Massachusetts, state and federal authorities ruled out suicide and started an international manhunt.

On July 2, Israel rode a scooter from a campground to police headquarters in Southwick, more than 100 miles from where his car was found. The next day, U.S. District Judge Colleen McMahon in Manhattan, who had sentenced him in the fraud case, ordered he begin his term and said she would seek to forfeit his bail.

Prosecutors have also filed charges against Debra Ryan, Israel's girlfriend, accusing her of helping him flee.

Karas refused to take Israel's plea on Aug. 6. Earlier that day, the former fund manager had attempted to plead guilty before a magistrate judge, who told him he had to wait until he appeared before Karas. Israel told Karas he was taking methadone to end his addiction to pain patches he had used for a back condition.

On July 28, McMahon ordered Israel to forfeit his Yamaha scooter, a Tiffany & Co. watch, $932 in cash and the 2007 Coach Freelander recreational vehicle he lived in while a fugitive. The property will be applied to the judgment entered against him, the judge said at the time. Israel owes investors $150 million.

The case is U.S. v. Israel, 08-cr-00723, U.S. District Court, Southern District of New York (White Plains).

To contact the reporter on this story: Lindsay Fortado in U.S. District Court for the Southern District of New York in White Plains at lfortado@bloomberg.net

Last Updated: October 28, 2008 11:46 EDT