Balkany Free On $250,000 Bail

"Seven or eight years ago, I was accused of wrongdoing. The government had to back off then," Balkany said after a hearing late Thursday. "This thing is much more ridiculous."

Brooklyn School Dean Charged With Trying To Extort $4 Million From Hedge Fund
By Chad Bray • DOW JONES NEWSWIRES

NEW YORK -(Dow Jones)- The dean of a Hebrew day school in Brooklyn was arrested and charged Thursday in an alleged scheme to extort $4 million from a Connecticut hedge fund.

Rabbi Milton Balkany, the dean of the Bais Yaakov day school in the Borough Park section of Brooklyn, was charged with wire fraud, extortion, blackmail and making false statements.

Balkany, 63 years old, faces up to 20 years in prison on the wire fraud count.

"Seven or eight years ago, I was accused of wrongdoing. The government had to back off then," Balkany said after a hearing late Thursday. "This thing is much more ridiculous."

Bail was set at $250,000 at a hearing late Thursday.

Balkany was accused in 2003 by prosecutors from the U.S. Attorney's office in Manhattan with misappropriating federal grant money, but those charges were dropped after he entered a deferred prosecution agreement in 2004, according to court records.

On Thursday, prosecutors from the U.S. Attorney's office in Manhattan alleged Balkany, between December 2009 and February 2010, contacted the lawyers for a Connecticut hedge fund, claiming an inmate to whom he was a spiritual advisor told him the hedge fund received inside information in 2004 and in 2005 to make profitable trades in at least six stocks.

The hedge fund wasn't named in court documents.

Balkany allegedly told the hedge fund's lawyers that he would instruct the inmate not to talk to the government if the fund paid $2 million to the Bais Yaakov school and $2 million to another school, prosecutors said.

He allegedly told the lawyers that prosecutors and the Federal Bureau of Investigation were aware the inmate had this information and were anxious to talk with him in mid-December 2009, prosecutors said.

Balkany allegedly told the fund's lawyers that, if they didn't pay, he would attempt to help the inmate reduce his sentence by allowing him to speak with government officials, prosecutors said.

At the same time, Balkany allegedly contacted the U.S. Attorney's office in mid-January 2010 to induce prosecutors to contact the inmate in order to put additional pressure on the hedge fund, prosecutors said. During those conversations, he allegedly made false statements, the government said.

According to court documents, several conversations between Balkany and the fund's lawyers were recorded.

Balkany said after Thursday's hearing that he was trying to help an inmate reduce his sentence, but declined to name the inmate.

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Comments

[danny]

From Wikipedia:

"He has also lobbied the U.S. Bureau of Prisons to improve conditions for Orthodox Jewish prisoners. According to the Village Voice, several people who have dealt with him say that he has claimed the power to arrange favorable treatment in prison for individuals such as Leona Helmsley and Eddie Antar.

He was subsequently banned from making any contact with prison service officials. As part of the 2004 deal with prosecutors of the charity fund pilfering scandal he agreed not to lobby on "any matter involving a federal inmate or any other person charged or convicted of a federal crime."

Prosecutors alleged that would ensure favourable conditions for Jewish prisoners in exchange for money of donations to his charities. After he arranged a brief prison release for Helmsley so that she could visit family members' graves before Yom Kippur, the billionaire made a contribution to his school."

[rivky]

I was in the court today listening to the complaint.

It was a purim shpiel story.

I feel bad for Rabbi Balkany because he will now have to spend money on lawyers counteracting this complaint.

[danny]

There is so much more in his Wikipedia page, I don't even know where to begin. Take a look. Bad apple for sure.

[Esther]

where is the U.S. Equivalent of Israel's "Takanah forum" to investigate financial sodomy by "spiritual advisors" like Balkany?!

[Esther]

where is the U.S. Equivalent of Israel's "Takanah forum" to investigate financial sodomy by "spiritual advisors" like Balkany?!

[chabadnik attorney]

Screw the FBI, extort $4,000,000.00 from a hedge fund and walk away scott free. Not. Delusional Gotti syndrome, yes.

[Bill]

The Wall Street Journal is reporting that audio recordings exist that are relevant to the alleged crime.

http://online.wsj.com/article/SB10001424052748703983004575074221645026944.html?mod=googlenews_wsj

[Witness]

This is trumped up a new charge by authorities that are jealous and desire to embarrass Rabbi Balkany. He knows his way around. He can make introductions. He has helped hundreds, if not thousands, of Jewish inmates in stae and federal prisons. He developed personal relationships with wardens and commissioners. He was accused a number of times of all sorts of wrong-doing and each time he was fully and publicly EXONERATED. There are elements within the government that hate him because he is more effective, politically, than many government officials. They hate him. They're jealous of him. When he alone, single-handidly, guided the school voucher movement, certain newspapers accused him of personally benefiting. Nothing was further from the truth and he was proven to be a dedicated servant of the community and not ever having sought any personal benefit. He will again be fully exonerated. You can bet on it and take it to the bank.

[Bilaams Ass]

n 1996 a request for $2.3 million in federal funding for a charitable project was accepted after then-U.S. Senator Bob Dole interceded on his behalf. Dole had been a beneficiary of Balkany's political fundraising and got involved after the proposal had first been rejected by the U.S. Agency for International Development.[7] The request was in relation to funding for an obscure Yeshiva in Jerusalem run by Rabbi Shlomo Riskin, Ohr Torah. Balkany subsequently sued Riskin in a Beit Din for $200,000 over non-payment of fees related to his activism on his behalf.[8] Riskin argued that he had never asked Balkany to intercede with Dole on his behalf and refused to attend the hearings[8]

On August 26, 2003, the US Attorney for the Southern District of New York, announced that Balkany had been detained on charges that he misappropriated approximately $700,000 in federal grant money.[12

e also used thousands of dollars in grant funds to pay for personal items such as life insurance premiums; credit card bills and income taxes.[12]

Balkany was charged in the Complaint with theft of government property, filing a false claim, wire fraud and obstruction of justice and released on a bond of $750,000.[12]

He is married to Sarah Rubashkin, an occasional lecturer on Chabad Hasidim, with whom he has 13 children. His father in law is Aaron Rubashkin the founder of Agriprocessors

etc, etc, etc...

[chabadnik attorney]

If they show $4,000,000 coming from that hedge fund, he is going away for a good long time.

When people commit crimes, especially of such magnitude, it reverses all the good they have done. The good is not really theirs to begin with. There goodness is done on the backs and at the expense of others. Thats the way the mafia works. The mafia bosses are revered by their communities and churches. Are we as yidden that foolish. I guess so.

[Bilaams Ass]

"I can't believe it. A rabbi stole my money. A rabbi stole my money."

-- comments of prominent Jewish American mobster Joseph "Doc" Stacher, arrested over the years for assault and battery, robbery, burglary, larceny, bootlegging, hijacking
and murder," then an Israeli citizen after being deported from America in 1965. These comments were made upon winning a lawsuit after being swindled by Rabbi Menachem Porush of the ultra-Orthodox Agudat Israel Party. [ROCKAWAY, R., 1993, p. 116-117)

[Gladys]

I think he is a hero to the Jewish people. Who has he supposedly extorted money from? A Jew? No! Some gentile hedge fund. Andwas he going to use it to help gentiles? No! It was going to Jews!

So what's the problem, nu?

Pretty much all gentiles know this moral calculus on some level of consciousness. The lying? The "false staements"? It's just good bargaining, that's all. And if it is good for Jews, all the better.

[Mr. Apikorus]

Who said it is a gentile hedge fund? (As if that makes a difference.)

I hope you were being sarcastic, Gladys, because if you aren't, you're one sorry bigoted bitch.

[Hometown Postville]

chabadnik attorney: When people commit crimes, especially of such magnitude, it reverses all the good they have done...
That paragraph said it all! These modern-day Robin Hoods have twisted morals- nothing more than mobsters hiding behind their religion to mask and justify their greed when they get caught. The REAL Robin Hood did not live like a King! This is more about worship of the almighty dollar instead of concern for fellow man.

[Norm]

Hometown:

I like the term "Robbing Hoodstein".

The only explanation I have for the rash of haredi scams and crimes is that they are double secret anti-semites doing everything they possibly can to reinforce negative Jewish stereotypes.

[effie]

His nickname is Rabbi Bunco. lol

[steve]

Balkany once made a veiled threat to the Uri Ltzedek leaders when they called for a boycott of Rubashkin products:

http://failedmessiah.typepad.com/failed_messiahcom/2008/06/rubashkin-son-i.html

This is his modus operandi. He thinks he can bully everyone and get away with it.

[WoolSIlkCotton]

Maybe that's why he wears a Godfather-style Homburg hat instead of a regular Chabad fedora.

[Yerachmiel Lopin]

I am not sure if there is an upturn in crimes, an upturn in prosecutions, or we just giving these things better media coverage. I suspect the crimes are up because it has become harder to make money legitimately.

[Big Jew]

Yerachmiel, no the crimes are the same I just think the Feds have cracked down and they are prosecutinyou will notice many of the big Ponzi schemes that were busted in the last few years have been going on for a long time. I think there's just a bigger focus by the Feds on fraud in the financial sector. In addition the IRS has cracked down on people evading taxes by funneling their money into offshore accounts. IRS has forced UBS to open up their accounts and reveal who has been hiding money there. The party is over. Crime no longer pays.

[state of disgust]

Effie:
Balkany was known as the "Brooklyn Bundler."
He would bundle checks from the Haredi community for politicians running for office. This gave him access to the pols and influence within the Haredi community.