A fugitive hedge fund fraudster who faked his own death to avoid a 20-year jail term has given himself up after nearly a month on the run.

Samuel Israel III, mastermind of America’s largest hedge fund scam, surrendered to police in a town near Boston, Massachusetts this morning.

After pleading guilty to cheating investors in his Bayou fund out of $450 million, Mr Israel had been told to report to a federal prison to begin his sentence on June 9.

Instead, he drove to a bridge over New York's Hudson River where he abandoned his car with the engine running and the words "suicide is painless" written in dust on the bonnet.

Police were immediately suspicious after no body was recovered and had Mr Israel declared a fugitive. His girlfriend, who handed police a suicide note on the day after Mr Israel disappeared, was later arrested for helping him to flee.

Police allege she planted another car near the bridge in which Israel then drove away, living in campsites and motorway rest areas using the aliases Sam Ryan and David Clapp.

After initiating a national and international manhunt, the FBI issued wanted posters detailing Mr Israel’s tattoo of a bird and describing him as "armed and extremely dangerous".

He was speaking to his mother on a mobile phone when he walked into a Boston police station to give himself up at 9:30am today. Mr Israel spent a short time in a cell before being taken away by US Marshals.

The 48-year-old, a co-founder and chief executive of the now-collapsed Bayou hedge fund, was sentenced in April. As well as 20 years in jail he was ordered to pay $300 million to his victims.

Prosecutors said Mr Israel persuaded investors to put huge sums into his Connecticut-based hedge fund by announcing nonexistent profits and providing fake audits. Meanwhile, he made millions in commissions on trades that lost money for investors. The fund's collapse prompted calls for stricter oversight of the US' $2 trillion hedge fund industry.

Ross Intelisano, a lawyer representing investors that lost money when Bayou collapsed in 2005, said his clients were looking forward to the moment Mr Israel reports to jail.

Responding to Mr Israel’s apparent suicide last month, Mr Intelisano said: “This is a very crafty guy who was able to steal a lot of money from other smart people. My gut tells me he’s not the type to jump off a bridge.”

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