The Rabbi Who Conned Himself: Sholom Rubashkin's Brother-In-Law Milton Yehoshua Balkany Hedges And Misses His Bets

The government says Rabbi Milton Balkany engaged in a shakedown, plain and simple, when he asked a wealthy investment firm for $4 million to keep its name out of an insider-trading probe. Balkany, veteran of New York politics and religion, says he has been badly misjudged. He was merely on one of his many missions from God, trying to line up one more carom shot on the pool table of life, using his high-level access in his usual manner to benefit everyone, especially fellow Jews.

The Rabbi Who Conned Himself
Milton Balkany hedges and misses his bets
Tom Robbins • Village Voice

The government says Rabbi Milton Balkany engaged in a shakedown, plain and simple, when he asked a wealthy investment firm for $4 million to keep its name out of an insider-trading probe.

Balkany, veteran of New York politics and religion, says he has been badly misjudged. He was merely on one of his many missions from God, trying to line up one more carom shot on the pool table of life, using his high-level access in his usual manner to benefit everyone, especially fellow Jews.

That dispute is up to a jury in Manhattan federal court. But the drama revealed by the secretly recorded conversations played at Balkany's trial last week is the stuff of theater, and even the likes of John Guare or David Mamet would have a hard time doing better.

For starters, there is Balkany himself, a 63-year-old rabbi with a regal bearing and bright white beard who cuts an impressive figure on any stage. He is known for raising small fortunes for politicians among Brooklyn's Orthodox Jewish community. He has also been cited for bending the rules in pursuit of his many causes. But nothing has ever stuck, and he and his attorney, Ben Brafman, say the current charge is the same as the others: a misunderstanding.

On the tapes, Balkany is heard describing his plan: First, Steven Cohen, billionaire hedge-funder, would write a pair of $2 million checks. One would go to the Brooklyn girls school Balkany has run for 40 years, the other to another needy yeshiva. This show of good faith would in turn shape the rabbi's spiritual advice to a prisoner serving a 96-month sentence for fraud in the Otisville federal prison camp upstate. Balkany's advice would be that the inmate say nothing to investigators about any wrongdoing he might know about at Cohen's hedge fund.

"I give you my handshake with my word, his name is never coming up," Balkany is heard telling Cohen's attorney in December. He was in a position to influence events, Balkany said, thanks to his standing among both the mighty and the fallen. "You know I give the invocation to the president quite often," he said. "Not Obama, but the Bushes."

In early January, Balkany visited Cohen's firm, SAC Capital, at its Stamford, Connecticut, headquarters. There, he told executives how his Washington connections "began with President Reagan when his wife came to spend a day in our school. Then he started inviting my wife and myself back to the White House. We were there many times as guests." He also had friends in Congress. "Every six weeks, a different senator from Washington comes to my house for lunch or dinner," he said, ticking off a list of names including Hatch, Lieberman, Specter, Kennedy, and Baucus. He knew law enforcement officials as well. "I'm friends with the Attorney General, and because I'm close with the, uh, Justice Department, I can come and go almost anywhere I have to," he told the hedge-funders. "I don't need any pass, I don't need any credentials."

He wasn't bragging, he said, but merely explaining how he came to learn about the trouble headed Cohen's way. During one of his visits to Otisville, where many Orthodox prisoners are held, an inmate named Hayim Regensberg, convicted in a Ponzi scheme, had approached him: The FBI was offering him early release in exchange for information about insider trading deals involving Cohen.

The rabbi's voice dropped to a whisper inside the conference room: "Regensberg asked me if I knew Cohen, because in the White House, in these parties and everything, you get to meet the big, the famous."

His own sources confirmed the probe. "I'm in touch with the FBI all the time," he said. Agents had urged him to get Regensberg to cooperate. "I don't know what they have on [Cohen], or why they're thirsty to tear him down, but I'm convinced that they feel Regensberg is their key," he said.

Balkany, however, had reminded Regensberg that it is forbidden to harm a fellow Jew such as Cohen. "'Listen, you can't do that,'" he said he'd told the inmate.

Still, the government was pushing hard. Agents were headed back to Otisville to lean on Regensberg. "They're coming back to him, I think it's tomorrow," he said.

What would inspire the inmate's silence, the rabbi said, would be a $2 million donation to his school, Bais Yaakov, and a "pure loan" of another $2 million to a Brooklyn boys school. "I don't want it to be misconstrued," the rabbi cautioned. "This is not a hold-up of Mr. Cohen, or anything like that." It was "pure charity," he explained, going to "two very, very worthy causes." It would also spare Cohen legal bills that could run millions more. "The FBI could destroy the man, I don't care how many billions he has."

He had done similar business with other powerful figures, he said. Leona Helmsley gave $2 million to his school when he helped her out in Danbury prison. Mighty General Motors had given $1 million for his aid with a bill in Congress. "I didn't even ask for it," he said softly. The hedge-funders nodded. They also were inclined to help, they said.

If this scene were mounted for an audience, you'd see Balkany thank his hosts, don his black homburg, and exit stage left. Stage right, federal agents would enter to disconnect the hidden video camera that captured the meeting. The next act would show the rabbi angrily complaining to Cohen's lawyer that his requests were being ignored: "They're taking it as some kind of joke," he said a few days later. "Good luck to them if that's their attitude."

You would then see him shift tactics in a bid to play both ends against the middle. On January 19, Balkany called federal prosecutors to tip them that Regensberg had knowledge about possible crimes involving Cohen. He painted his own role somewhat differently. Despite "the stigma" of a Jew informing on a fellow Jew, he said he was urging the inmate to tell all. "I made it clear that he should cooperate," he told investigator Robert Manchak.

He asked for a few considerations in return: One inmate should be reassigned to a prison nearer home, and another admitted to a special program. Also, reduced sentences should be granted to both Regensberg and Sholom Rubashkin, a Balkany relative who had been "shafted very, very badly" in a case involving abuses at a kosher-meat plant in Iowa. "As you can see, my requests are not outlandish," he said. "They're not crazy."

Over the next couple of weeks, the tapes show Balkany desperately trying to make his bets pay off. In one call, he would scold Cohen's people for not living up to their pledge to deliver the promised checks. In the next, he would urge the feds to accompany him to Otisville to hear Regensberg's secrets.

Actually, as evidence introduced by prosecutors Jesse Furman and Marc Berger in Judge Denise Cote's courtroom last week showed, there were no FBI visits to see Regensberg at Otisville. Even Rabbi Balkany, the visitor logs showed, made only a single prison visit weeks before he contacted Cohen's firm.

The last act belongs to the jury, but the most dramatic scene played out on February 18, moments before Balkany's arrest as he tried to deposit a $2 million check that the hedge-funders had finally handed him. "The check that you gave me," he said in a frantic call to Cohen's lawyer, "it's a closed account with no money in it." Maybe, he proposed, they could wire the money?

Rabbi Balkany is Aaron Rubashkin's son-in-law and the brother-in-law of convicted felons Rabbi Sholom Rubashkin and his brother Moshe Rubashkin. Moshe Rubashkin's son, Sholom – known casually as Sholom, Jr. – is also a convicted felon.

Comments

[Adam Neira]

Hedge fund managers who break the law to make a buck must be prosecuted. If the allegations are true then this is an abuse of power and attempt to pervert the course of justice. The only problem here is that many, many other bankers, hedge fund managers and financial executives have done similar things all around the world. Perhaps a big team should be set up to investigate such excesses, but I fear the dirt that would be dug up would make Mount Everest look like a molehill.

[A E ANDERSON]

This is a bit of a smear in that there is no substantive connection among the acts (alleged or otherwise) of Balkany and the Rubashkins. Ditto for the linkage between Moshe and Sholom Rubashkin: Moshe Rubashkin was an environmental polluter of sorts, if I recall, and his acts have nothing to do with Sholom Rubashkin's unsuccessful (and criminal) attempts, 1000 miles away, to save the abattoir business with loans based on inflated or misused collateral (i.e., bank fraud).

[steve]

Pure scum of the earth.

[jade]

how ugly, he is! my g-d!

[cvvpost]

hes goin down this time for a while

[flailed]

His handshake and his word. On his mission from the Lord Almighty. Sleazyuk.

[steve]

They should change his nickname from Brooklyn Bundler to Brooklyn Bungler or Burglar. You would think this career criminal would have learned something from the fates of his brothers in law.

[Tonda]

Now just imagine how this would be reported if their last names ended in a vowel, and they called their home country somplace on the north side of the Medidteranian instead of the south side.

It seems that in certain circles Rabbi is just yiddish for Don.

[phillip]

What a family...... Tony Soprano would
be proud.

[danny]

"He was merely on one of his many missions from God, trying to line up one more carom shot on the pool table of life, using his high-level access in his usual manner to benefit everyone, especially fellow Jews."

Mofo thinks he's John Belushi!

[danny]

After Balkany's previous legal entanglement (in which avoided prison by the skin of his teeth), he was specifically ordered not to interact with /minister to with prison inmates. Idiot couldn't even comply with something that simple.

[steven stelfox]

Doesn't change the fact that Stevie Cohen and SAC have probably used inside information hundreds of times.

[Teddy]

Tonda, you think Balkany and its inlaws are from AFRICA?
Did you have a chabadnik geography teacher?

[OMG]

Why is this story only reported in the Village Voice, were is the NY Times, Post and the Daily News?

[Tonda]

Sorry, I'm the product of a public school education.

Usually though, I try to stay away from that whole, central europe/mideast origination argument, and just play along that all Jews hail from that area. Otherwise some around here get their panties in a bunch and play the anti-semetic card. It seems that pointing out a pattern of behaviour buy certain groups is interpeted as an attack on the entire religion. It seems the Shas party members around here think it's just bad form for the donkeys to say anything negative about their masters.

So let me clarify that the previous post applies ONLY to those Jews showing a repeated pattern of criminality and not to the entire population. I wouldn't want to ruin a certian someone's morning coffee.

[FirstGenerationBavarianAmerican]

"Why is this story only reported in the Village Voice, were is the NY Times, Post and the Daily News?

Posted by: OMG | November 10, 2010 at 04:51 AM"

Long form stories like this are a staple of the Village Voice, and usually involve original investigative reporting. Apparently, this story is not considered newsworthy enough by the town's daily newspapers.

[Solomon Dwek]

I just can't believe Ben Brafman is not settling the case. Does he actually think he can get an acquittal here? WTF is he thinking?

[Menachem Mendel lll]

B'EZERT HA'SHEM aka The Abishter, Rabbi Milton Balkany will bunk with his beloved and also innocent brother-in-law.

MOSCHIACH UBER ALLES

[state of disgust]

Ben Brafman has been successful getting Balkany off in the past, so why not go one more time to the well and try again?

The difference: this time they have visual evidence so Balkany will be doing jail time with his brother-in-law SMR up in Otisville.

Time for the entire family to make aliya to Uruguay.

[mushka]

it is amazing to see the connection between those two criminals. sholom rubashkin and his bro in law milton balkany .
i'm sure there are more hard core criminals in the family , the authority do not know about .

it's like the Gotti family . serial criminals and gangsters .

[Devorah]

Does he go home at night to sleep and aren't they concerned he will flee to Israel?

[OMG]

Posted by: FirstGenerationBavarianAmerican | November 10, 2010 at 08:08 AM

Thanks, for your reply, but that is exactly why I am perplexed, this story has all the intriguing parts, a Rabbi, and a political bundler, using his so called connections to shakedown a billionaire, for a cool four million dollars. Finally, there is video which a TV station should pick up. Why oh why.

[Solomon Dwek]

I wish this would be televised. Achhhhhhh - too bad it's not.

[Shmarya]

this story has all the intriguing parts, a Rabbi, and a political bundler, using his so called connections to shakedown a billionaire, for a cool four million dollars. Finally, there is video which a TV station should pick up. Why oh why.

Because the video is not a public document. Because the trial is not over. Because the Times doesn't really cover Brooklyn and the Post and News don't yet have much to write about.

Wait for the summations and closing arguments, and then the verdict. That's where there will be coverage.

[Solomon Dwek]

I am quite certain that the personalities on the jury will throw the book at Miltie.

[mushki, the stripper]

i wanna see him locked up ..........
for 30 years!!!

[Former Postvillian]

Sounds to me like business/politics as usual for a "influentual" New Yorker. G-d forbid someone actually earn a honest living there the old fashion way...working for a pay check. It appears to me scams, government programs, or scamming government programs are the prefered occupations of choice.

[neighbor girl]

Balkany found guilty.
http://www.crownheights.info/index.php?itemid=29903

[Bassy the Haredi Slayer]

Steve Cohen is a very wide man, what information Regensberg had on him, Cohen was wise to try his luck with the government.

The moral of the story, if you need to choose between the government and a haredi choose the government.

Interesting that with all his talk about the prohibition of mersira he did not have any problem to snitch on Cohen while still trying to extract money from him.

Cohen is for sure wiser than Thomas Kaplan who follows Tropper to the end

[aryeh]

....... a 'misunderstanding' ?.......
i wanna see that in court, during the trial .

his political connections will not let him go free after conviction . not for financial fraud . he's gonna go to jail for many decades .