Inmate Said Involved In Balkany Scam Named

Legal sources identified  the inmate whom Balkany said he had spoken to about SAC. He was convicted last year of defrauding about a dozen people in a three-year long Ponzi scheme.Inmate named in extortion bid of hedge fund SAC.

Inmate said to be involved in hedge fund blackmail named
Rabbi's lawyer-client not motivated by criminal intent
By Matthew Goldstein and Svea Herbst-Bayliss • Reuters

NEW YORK/BOSTON, Feb 24 (Reuters) - So there's this rabbi, a famous hedge fund manager, and a securities swindler who was convicted last year of running a $13 million Ponzi scheme.

What may sound like the beginning of a joke is actually the increasingly bizarre plotline of the unfolding criminal case against Milton Balkany, an Orthodox Jewish rabbi and director of religious school in Brooklyn, New York.

Late last week prosecutors arrested Balkany for trying to persuade the hedge fund manager to donate $4 million to two schools in return for keeping the imprisoned investment manager from talking about the fund's alleged insider trading deals.

The bizarre scheme is complete with tape-recorded telephone conversations played out late last year in Brooklyn, the Otisville Correctional Facility in Otisville, N.Y., and the hedge fund's Stamford, Connecticut office, the government said.

The government did not name the hedge fund or the inmate.

Reuters last week identified the manager as Steven A. Cohen, whose SAC Capital Advisors manages $12 billion and ranks as one of the world's biggest and most successful fund firms.

According to the government's allegations, Balkany was trying to take advantage of media reports that prosecutors might be targeting SAC in an ongoing investigation into insider trading in the hedge fund industry.

Legal sources identified Hayim Regensberg, 44, as the inmate whom Balkany said he had spoken to about SAC. Regensberg was convicted last year of defrauding about a dozen people in a three-year long Ponzi scheme.

He is now serving an eight-year sentence at the Otisville prison located in the Catskill Mountains that is known to have many observant Jewish inmates.

According to prosecutors, the investigation of Balkany began in December, after he placed a phone call to SAC's offices and informed a lawyer for the hedge fund that he had information that could be of value to them.

The 63-year-old rabbi allegedly told lawyers for the hedge fund that Regensberg had information about insider trading at SAC and was being pressured by the government to cooperate.

The government said that none of what Balkany was telling either SAC Capital or prosecutors was true.

Soon after, Balkany approached the hedge fund and SAC's lawyers alerted the government to the apparent extortion scheme.

It is unclear whether Balkany and Regensberg, who has not been accused of any wrongdoing in this case, ever met, sources said. Regensberg's wife did not return several phone messages.

Regensberg's attorney Robert Baum, who defended the investment manager and is working on his appeal, declined to comment on the Balkany case.

Yusill Scribner, a spokeswoman for Manhattan U.S. Attorney Preet Bharara, declined to comment.

A spokesman for SAC Capital also declined to comment.

But Balkany's lawyer, Benjamin Brafman, described his client's actions as being fueled more by "bad judgment" not criminal intent.

"I do not believe Rabbi Balkany's intention was criminal," said Brafman. "I think there is a difference between using bad judgment and acting with criminal intent. This is a case of very bad judgment." (Reporting by Matthew Goldstein and Svea Herbst-Bayliss, editing by Leslie Gevirtz)

Comments

[Chayim]

Rabbi Balkany will get off this one because its private money and the government entrapped him by posing as representing the hedge fund. This case is fare easier than his last case with government money. Rabbi Baklkany is a true hero to our people and fights for yeshivas to get their vouchers. Its the anti Torah camp that hates him because he gets government to support yeshivas which means more Jewish kids get a real Jewish education and this weakens the reform and conservative movements. All power to you and keep fighting for the chosen people.

[Good Samaritan]

Chayim
I don't know if you experiment with psychedelic drugs or what but your comments on nearly every story are absurd.

[Chayim]

To good samaritan,
The good samaritans were not so good especially how it led ti inqusitions,crusades,pogroms and a holocaust against Jews.
When a chareidi jew expresses a normal opinion than you open minded pigmies accuse him of experimenting with psychedelic drugs. When you secular express views that are anti normal like a many man m,arrying a man and soon a man marrying his pet dog,all is wonderful. When women are turned into hordes of shrieking feminists and babies are torn out of mothers wombs under the holy cause of pro choice all is normal. Got news for u buddy CHAREIDI POWER NUMBER ONE.

[steve]

Balkany was, is and always will be a crook. THE END.

[Simcha]

He is a crook and will finally get what is coming. Even Ben Brofman can't defend this clown. They are using the Rubashkin argument that he "made a mistake", it aint gonna work this time. In due time every member of the Rubashkin Crime family will be in prison. Stop creating the chilulei hashem. Mark my words, after he is convicted there are going to be communal rallies and letter writing campaigns begging the judge to throw out the case. Not this time.

[Isa]

I bet the GOVERNantisemitism etc by the Rubashkin crowd.
This Balkany thing just may be payback.

Mr.Chayim:
Ever hear of extortion, blackmail, income tax evasion...

There was this prison chaplain that got caught up in some government sting [forgot where] he was lucky- they gave him a deal and no time but he is a felon for the rest of his life.BTW that was PAYBACK!

Go ahead, accuse this government of antisemitism maybe they would even give this dope a chance of a plea deal

[Isa]

I had a long day...
TWO bad typos for the above

[levi]

The parable of the good Samaritan:

A man was travelling north from Jerusalem when he was waylaid by bandits. As he lay wounded on the roadside, a Kohen passed by and crossed the road to avoid him. Thereafter a Levite passed and crossed the road, and then an Israelite. Then a Samaritan (Shomroni) came by, fed him and wrapped his wounds. The Samaritan brought him to an inn and gave the proprietor two Dinar, bidding him to care for him, and if the money ran out, he would foot the bill.

This parable was told in response to the question: "what is the basic teaching of the torah" to which the legalist responded: "Veahavta es hashem... ve'ahavta lere'acha kamocha" To which was queried "Who is considered your fellow". Hearing no reply Jesus gave this parable and then asked "tell me now, who is considered this man's fellow?" The priest, the Levite, the Israelite or the Samaritan?

Luke ten or thereabouts

[levi]

Nowadays they say (as per Rashi) Reyacha betorah u'mitzvos, and thus exclude the frei and the goyim. This pshat is then further extended to all the mitzvos ben adam lechavero, which is why they are allowed to steal from Goyim. I like Yoshke's pshat better

[Witness]

Jews are NOT allowed to steal from Gentiles. Period. Obligations such as returning lost items are different since Gentiles have no obligation to return lost items to Jews, there is no recipcoral obligations. However, Jews are ABSOLUTELY not allowed to steal from Gentiles, IN ADDITION to the potential of CHILUL HASHEM.

[justice seeker]

Such a good and GENEROUS man. This is blood liebel....More like another dishonorable bottom feeder that has never done an honest days work in his life. Looks like another cohort of the meat packing mafia is going to the big house.

[Big Jew]

Justice seeker
Wait until they start screaming blood libel anti semitism....The circus is just getting started.

[Critical minyan]

I have a few female/ex-haredi friends that graduated from Beis yakov. They can barely read or write English.
Balkany should be punished for that as well. Based on these women's lack of education, you can assume that all the money hw was taking was going straight to his pocket.

[leto]

When I was in yeshiva there was a case of a frum owner of an old age home in which he also kept the old people in conditions of complete filth. At that time I thought the answer to this type of behavior was for people to learn Musar. Now I wonder if learning musar causes the problem

[effie]

"Obligations such as returning lost items are different since Gentiles have no obligation to return lost items to Jews, there is no recipcoral obligations."

Everyone has a legal obligation to return lost property. Otherwise, you're guilty of misappropriation of someone else's property, a form of theft. If you don't know the owner, you turn it to the lost and found or drop it off at the police station.

[Bill]

Effie,

I don't think anyone has a duty to take custody of found property.

However, if custody is taken, I agree with you that one is obligated by law to return it.

As an aside, haredi yeshivahs teach their students not to return found property that clearly belongs to a Gentile, but to return items that appear to belong to a Jew, as per the Talmud.

[Chana Blima Cohen]

Notice that Ben Brafman has been lukewarm in his support of his client. Because even the great Ben knows that Milton's actions were indefensible. (Let's not call him Rabbi, please!)

[jomadar]

chana blima you hit the nail on its head this is a no brainer indefensible he is a serial crook

[Devorah]

His attorney said the Rabbi used "bad judgment."

Bad judgment is making a left turn when you should make a right turn. It's NOT extortion. Duh

[Chana Blima Cohen]

The interesting point is that Ben Brafman is not putting his credibility on the line for Balkany. He is headed toward a plea.

Brafman doesnt take the obviously guilty to trial. See Michael Hershkowitz. See Jacob the Jeweler etc.