Balkany Bust: Will There Be More Arrests?

$2 million bribe was slated to go to Balkany's school, but another $2 million was meant for Torah Vodaath, a yeshiva headed by OU's Rabbi Yisroel Belsky.

Brooklyn rabbi is charged with $4M hedge fund blackmail scheme
BY ALISON GENDAR • New York DAILY NEWS

A Brooklyn rabbi, accused seven years ago of stealing government grants, was busted Thursday for blackmailing a Connecticut hedge fund to give $4 million to two schools he works with, prosecutors said.

Rabbi Milton Balkany, 63, was charged with extortion, blackmail and making false statements as part of an elaborate scheme to shake down the hedge fund, prosecutors charged.

They say Balkany told the hedge fund the U.S. Attorney's Office and the FBI were trying to get a jailbird he knew to give up information about illegal insider trades made by the financial firm.

There were no insider trades.

Balkany made up the story to trick fund managers into giving millions to the Bais Yaakov School in Borough Park, where he is the dean, and another school, Torah Vodaath, prosecutors said.
Balkany said prosecutors are telling tales.

"Seven or eight years ago I was accused of wrong-doing and the government had to back off then. This is much more ridiculous," Balkany said as he dodged photographers while leaving Manhattan Federal Court Thursday night.

"When you are in public service that's the price you pay. An innocent man is constantly dragged through the mud," he said before speeding off in a black SUV after being released on $250,000 bond.

Balkany, known as the "Brooklyn Bundler" for his skill at campaign fund-raising - mostly Republican - said he was just trying to help a young man in prison.

"This is from helping an individual in jail. He got a very lengthy term and I was trying to reduce it. I was in touch with the U.S. Attorney's office the whole time," he said.

Prosecutors say it was all a scheme.

He told the hedge fund managers that if they quickly turned over $2 million to Bais Yaakov and another $2 million in a loan to Torah Vodaath, he would tell the inmate not to talk.

Without the money, Balkany said he would get the Otisville inmate to spill his guts to the FBI.

Balkany told the hedge fund manager since they were both "'co-religionists' he did not want to see him get hurt," the federal criminal compliant charged.

A lawyer for the hedge fund recorded his conversations with Balkany.

"This is not a matter that can sit around indefinitely," the rabbi said, according to the criminal complaint.

He later said prosecutors were out to get the hedge fund manager.

"He's the one they want. ... They would love to target (him) and chop him down, you know."

"You tell me what to say, what not to say, who to say about, who not say about and I will do exactly what you tell me," Balkany said, according to the criminal complaint.

The feds set up a meet between Balkany and the hedge fund lawyer for Thursday. As audio and video tapes rolled, Balkany accepted two checks from the hedge fund - $1.25 million for Bais Yaakov and $2 million for Torah Vodaath, according to the criminal complaint.

This is the second time Balkany's been accused of being involved in financial shenanigans.

In 2004, he agreed to pay back some $700,000 in federal grants earmarked for disabled preschoolers. So prosecutors in Manhattan's Southern District agreed not to prosecute.

"The government had to back off. And it wasn't that much that I paid back," Balkany said Thursday night.

In that deal, Balkany also agreed never to lobby the federal Bureau of Prisons again on behalf of any federal inmate.

He had been implicated - but never charged - in a scheme to bribe prison officials to transfer inmates from tough prisons to cushy "Club Fed" prison camps.

Previous Posts: 1, 2.

Balkany Index.

Comments

[Yudels Mistake]

WOW! Lead with a headline that has ABSOLUTELY NOTHING to do with the story you link to...

[Successful Messiah]

Scotty, while I realize you may have a desire to try to discredit Rabbi Belsky, anyone who knows anything about that school knows that Rabbi Belsky has absolutely nothing to do with the financial operations of Torah Vodaath. Even if there were some hanky panky going on at Torah Vodaath, it is highly unlikely that Rabbi Belsky even knew about it.

[Big Jew]

Successful Messiah is 100% correct. Rav Belsky gives shiurim. He has nothing to do with financials. Although I am shocked that Torah Vodaath would get involved in this.

[Sheri Deen]

It takes a person like Tiger Woods to show us Yidden what real teshuva is. Let us hope that all Klal Yisrael will engage
in a teshuva shleima.

[me]

just for your info rabbi balkany is married to shalom rubashkin sister

[dani]

I seem to remember that back in Nov.2004,
someone was accused of improper scheita
(with hooks), never heard of an apology,or
the immediately calling in Temple Grandin to check it out.

[Big Jew]

Shmarya,
Why would you put Rav Belsky's name into this? There are other Rosh Yeshivas in Torah Vodaath that have just as little to do with the financials as Rav Belsky. He is not the only Rosh Yeshivah and he doesn't even give the highest shiur! Want the other Rosh Yeshivas names so you can say more Loshon Hora? You are not an honest journalist. You just look to trash anyone you don't like. You have no standards.

Vous avez le cervau d'un sandwich au fromage

[dani]

I know someone who sent letters to N. Lewin
an to 12 men at the OU to look into the
agri.mess in 2005. He never heard an answer, so he threw up his hands and said
Rebbeno Shel Olom, I failed , it's up to
You.

[steve]

Belsky is known to use similar heavy handed tactics to get what he wants. I am not implying that he was in on this, just stating his track record.

[Devorah]

"It takes a person like Tiger Woods to show us Yidden what real teshuva is. Let us hope that all Klal Yisrael will engage
in a teshuva shleima"

At least with Tiger Woods, the women were consenting adults. When Rabbis abuse children or wives, the latter are not consenting.

[danny]

So Balkany agreed to never again lobby on behalf of prisoners back in 2004. Yet he loves Otisville so much, he can't stop going and getting involved in criminal mishigas. And he messes with the Feds after prior entanglements.

It's way beyond chutzpah. Its positive insanity. My mind is boggled.

[LL Cool Jew]

As long as the haredi criminals know that in worst case scenario they will end up in Otisville where they daven , study, shmuz and play all the day, and every weekend their family comes to visit them and they can get gourmet kosher food they will continue committing their crime.

But if the Feds will start to send them to federal prison in North Dakota and places like this I am sure they will think twice before they commit their crime.

[Witness]

Rabbi Yisroel Belsky is the most highly respected Morah Horoah in today's yeshiva world. He has absolutely nothing, zero, zilch, nada, efes, goornisht, etc., to do with the finances or the financial office of Torah Voddaath. Rabbi Balkany, however, is a longtime members of the board at Torah Vodaath. Presumably, Rabbi Balkany was seeking to engineer chariotable funds for his alma mater.
The last time Rabbi Balkany was charged, he was exonorated. Most likely, we will see a replay of the last prosecution. Considering that Ben Brafman is repesenting Rabbi Balkany, the smart money is on his dismissal.

[Big Jew]

Witness:
Torah Temima also hired Branfman to defend them with serial molester Kolko. He can't win a lost case.

[danny]

Witness. Rabbi Balkany was not exonerated by any stretch of the imagination. He had a "deferred prosecution" agreement with the Feds and paid a portion of the money back as a result. This is not exoneration. He used his political influence to get his coal pulled out of the fire.

By the skin of his teeth he avoided prison. But the lesson was apparently not learned.

[HaNavon]

actually this may be the beginning of the end for the orthodox rabbinate.
once they arrest one of the roshei yeshiva for knowledge of and participation in illegal activities, soon, hopefully, the dominoes will all fall down.
i still hope that they arrest the heads of torah u'mesorah and agudas yisroel for having known about the pedophile rabbis in yeshivas and not acted to stop them.

[yudelsmistake.blogspot.com]

Big Jew, Brafman was not retained in the Kolko case.

[Veganovich]

Shmaya,

If you actually read the complaint, you should know that no one at Torah Vodaas seems to be involved in this matter. Although Balkany stated he wanted $2 million on behalf of Torah Vodaas, he then tried depositing the $2 million check made out to Torah Vodaas in an account of Bais Yaakov of Brooklyn. See page 26 of the complaint. It’s obvious that you feel a great deal of hostility towards the frum community and that leads to mischaracterize things. If you want to be taken seriously, act like your first commitment is to the truth.

The big mystery is the identity of the federal inmate at Otisville and whether he was involved. We should know within a few days, because there are actually fewer frum prisoners there than people think.

[Clue]

Matzav reports that the Appellate Divsion has reversed a Supreme Court ruling vacating a Beth Din America arbitration award.

Since you made much of the Supreme Court decision, you should at least report the unanimous reversal.

Matzav also shows where to access both decisions.

[Bill]

Vogan,

The Otisville inmate is most definitely involved. Why else would Balkany push so hard for a meeting between the Otisville Inmate and the Feds?

The Feds, though, built the case without him. The audio/video excerpts seem extremely damaging for the defendant.

They will undoubtedly move to have the evidence thrown out, but if it's admissible, he's got a huge problem....

[effie]

Clueless: The decision was reported just yesterday. Since you made such a big deal of it, you should at least create a hyperlink to the article and to the court's opinion and post them here.

[Clue]

I did not make a"big deal" about it.

I just gave a heads up. I thought my comment was respectful,but if it is not, I apologize. Not everything deserves a fight.

I would create a hyper-link if I knew how.

[Clue]

On December 30, 2008 in a comment on this blog, I strongly questioned the lower court's decision. I stated that the lower court judge "did not understand his office."

I in turn was criticized by two other comments.

It does sometimes help to have a law degree.

[seymour]

when I was a kid the yeshivas where defrauding the government. Of course the money men where doing the fraud.

Of course people then as now said the rosh yeshiva did not know. What a delusion, I knew my friends knew and we where only 12-13 years old.

Don't be so sure the rosh yeshiva did not know

[Dr. Dave]

It takes a person like Tiger Woods to show us Yidden what real teshuva is. Let us hope that all Klal Yisrael will engage
in a teshuva shleima.

It's only real teshuva if the next time he is with a porn star he doesn't impregnate her. Twice.

[sheri]

Dr. Dave You are right, it's the next time that tests real teshuva. We must wait & see

[Mark]

Shmarya, lose some weight. Fat pig.