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February 18, 2011

Balkany Gets Four Years

Rabbi Milton Yehoshua Balkany Rabbi Milton Yehoshua Balkany, Aaron Rubashkin's son-in-law and the brother-in-law of convicted Agriprocessors executive Sholom Rubashkin, was sentenced to four years in prison for trying to extort $4 million from Steven Cohen’s SAC Capital Advisors LP.

 

Brooklyn Rabbi in SAC Capital Extortion Plot Sentenced to Four-Year Term
By David Glovin and Patricia Hurtado • Bloomberg

Rabbi Milton Yehoshua Balkany Milton Balkany, a Brooklyn, New York, rabbi, was sentenced to four years in prison for trying to extort $4 million from Steven Cohen’s SAC Capital Advisors LP.

U.S. District Judge Denise Cote sentenced Balkany today in Manhattan. Balkany, 64, was convicted by a federal jury in November of extortion, blackmail and other charges. His defense attorney, Alan Kaufman, had asked for leniency.

“Just because you lead a charitable institution doesn’t give you a pass to commit extortion and fraud,” Cote told Balkany in court.

At the trial, prosecutors said the rabbi, who was dean of the Bais Yaakov day school in the Borough Park neighborhood of Brooklyn, told the Stamford, Connecticut-based hedge fund that he was the spiritual adviser to a federal prisoner in Otisville, New York, who could implicate the fund in wrongdoing. Balkany then called prosecutors in an attempt to put pressure upon SAC to further his scheme.

Kaufman said in court papers that Balkany deserves leniency because of a “lifetime of good deeds” and community service. Balkany has 13 children, including a handicapped daughter, and his family would suffer hardship if he were incarcerated, Kaufman said.

Witnesses testified at trial that Balkany told a lawyer for SAC that the inmate would keep quiet about alleged illegal trading by the hedge fund in 2004 and 2005 if it paid his school and another school $2 million each.

The lawyer instead recorded his phone calls and meetings with Balkany, who was arrested last February after taking two checks from SAC totaling $3.25 million. Balkany told an SAC official at the time that the inmate wouldn’t talk to federal authorities at a meeting scheduled for the following day. No such meeting was planned, according to the government.

The case is U.S. v. Balkany, 10cr441, U.S. District Court, Southern District of New York Manhattan).

[Hat Tip: Hadasah.]

Update 2 pm CST – The AP is reporting Balkany was sent immediately to prison:

NY rabbi imprisoned for 4 years in extortion case

NEW YORK (AP)  — A prominent Brooklyn rabbi has been sentenced to four years in prison for scheming to extort a Connecticut-based hedge fund into paying millions of dollars to two schools.

Rabbi Milton Balkany was sent to prison immediately Friday by a federal judge in Manhattan. The 64-year-old Balkany had been convicted of extortion, blackmail, wire fraud and making false statements.

Prosecutors say Balkany threatened and lied to workers at the hedge fund to persuade them to send him checks totaling $3.25 million. They say he told them he was a spiritual adviser to an inmate who had knowledge of insider trading connected to the hedge fund.

Update 2:25 pn CST – The New York Post has a more complete report:

Crooked rabbi gets four years for hedge-fund exortion scheme
By BRUCE GOLDING • New York Post

He'll be saying his prayers behind bars.

A crooked rabbi was sentenced to four years in the slammer today for trying to shake down a hedge fund for $4 million by promising to cover up concocted claims of insider trading.

In an unusual move, the judge also ordered Rabbi Milton Balkany locked up immediately, saying she was "seriously concerned" he might try to run away if he remained free on bail.

Balkany -- who made an impassioned plea for no jail time -- stood stock still as his punishment was imposed, then smiled and blew kisses to about a dozen family members as he was led off by deputy U.S. marshals.

"Have a good shabbos," Balkany said.

Manhattan federal Judge Denise Cote told the 64-year-old Brooklyn resident that he had committed "very serious crimes" by trying to blackmail billionaire Steve Cohen's SAC Capital Advisors.

"The lack of contrition, remorse and acceptance of responsibility, in my mind, is profound," she said.

But Cote cut Balkany a break from sentencing guidelines that recommended at least seven-plus years behind bars, citing his "lifetime of good works" and the "generosity of spirit" attested to in 87 letters of support.

Although his lawyer said Balkany would remain silent due to a planned appeal, he launched into an impromptu, 20-minute speech when given the chance.

While he didn't address his extortion conviction, Balkany denied charges that he misused a $700,000 Housing and Urban Development grant, for which he struck a deferred prosecution deal in 2004.

He also vehemently denied uncharged allegations that he schemed to bribe federal officials for favorable treatment of Jewish inmates, saying a $240,000 payment went "to a consultant, and we can prove it to the penny."

"I never gave a toothpick to a public official in my life," said Balkany, who at several points got so excited that he had to adjust his yarmulke to keep it from falling off.

A spokesman for SAC Capital declined to comment.

Update 5:20 pm CST – Here is the New York Daily News report:

Brooklyn rabbi sentenced to four years for extorting $4 million from hedge fund
By Scott Shifrel • NEW YORK DAILY NEWS

A Brooklyn rabbi convicted of extorting $4 million from a hedge fund was sentenced Friday to four years in prison.

Milton Balkany, 64, who headed a religious day school for girls in Borough Park, faced up to nine years in prison, but Manhattan Federal Court Judge Denise Cote said she took into account the rabbi's good deeds.

A lower sentence "would be appropriate based on a lifetime of good works and generosity for those in need and people who are the forgotten of society, the most unfortunate among us," Cote said, citing 87 letters written on Balkany's behalf.

And yet, despite the rabbi's plea for a no-jail sentence, Cote said some prison must be imposed to teach him a lesson.

"You were subject to criminal charges because you engaged in criminal behavior," she said. "You picked up the phone and tried to extort $4 million from a hedge fund ... the lack of contrition, remorse and sense of responsibility here in my mind is very profound."

Balkany was a "spiritual adviser" to a federal inmate who he said told him about insider trading at billionaire Steve Cohen's SAC Capital, prosecutors said.

The rabbi then demanded money from the fund or he'd tell the inmate to tell the feds about the trades. He even went as far as to contact the U.S. Attorney's office in Manhattan to get prosecutors to talk to the inmate.

SAC Capital advisors is a controversial Connecticut hedge fund who has had several ex-workers either charged or investigated in a massive insider trading probe by the U.S. Attorney's office.

Neither Cohen nor the firm itself has been charged, and jurors at Balkany's trial did not hear about the issue.

Balkany, a politically connected rabbi who skirted a federal investigation into bribery, misuse of HUD funds and other charges a decade ago, did not address the November conviction but denied the old bribery charges.

"I never gave a toothpick to a public official in my life," the rabbi said.

He also cited a letter of support from former U.S. Attorney Alan Vinegrad and said that current U.S. Attorney General Eric Holder, a former member of Vinegrad's firm, would "be my first witness" to prove he never bribed anyone.

"I'm just hoping and praying that your honor will take the totality of (this) situation," Balkany said.

His lawyer asked that the judge postpone his imprisonment until after the Sabbath, which begins Friday night. But Cote denied the request.

Before being taken away by federal marshals, the white-bearded rabbi waved at his more than two dozen family members and supporters, called out "Good Shabbos" and blew his wife a kiss.

Comments

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YOU CAN BET HE PAID SOMEONE FOR THIS, HE DESERVED ALL 20 YEARS HE KNEW WHAT HE WAS DOING DONT BELIEVE FOR ONE SEC HE DID IT FOR CHARITY HE DID IT SO HE COULD PAY FOR HIS CUSTOM WHITE SHIRTS ARMANI SUITS AND PRADA SHOES. THE GOVT FORGOT FAST HOW HE MADE A JOKE OF THEM ON RADIO SAYING THEY APOLOGIZED. NO ONE APOLOGIZED AND HE HAD TO PAY EVERY PENNY BACK. HE MAKES ME SICK

Dirt bags like Balkany are why we get called kikes.

HE is a great man and got a great sentence!!!

Justice in America was served!!!

forgotten,
you're right....and in 18 months he'll be out!!!
his kids live like millionaires...all fine and good but you can't be a rabbi AND a criminal...choose one.
block voting saved him too...big time...
and he paid people off....


4 years...
wow! that's one great deal he made.again.

ruthie - actually a few of his kids ARE millionaires. They have good business and jobs.

I don't know, but why should a man get leniency because he has 13 kids and one is handicapped. First of all, with 13 kids the chances are at least one will have some significant issue, and secondly, why should a man with 13 kids be treated differently than a man with no kids?

There is no parole in the federal system. He can be released into a half way house about 6 months before they kick him out and that's it.

I am so glad that at least he didn't get away with being a thief. Sneaky bastard! Makes me dislike my own people, such chutzpah. So glad when justice is served. I have had some unfortunate experiences with rabbis, turning out to be swindlers, adulterers, liars, and thieves.
Good riddance, even though temporarily, to bad rubbish! And family of rubbish as well.(lol)

effie..thanks, i didn't know that.
itchiemayer...good point
david....no argue...still :)

if balkany got 4 years, rubashkin should have gotten 4 months community service, because his crimes pale by comparison. at any rate, any news that gets you bastards on this blog pissed off is good news indeed :)

well..i hope it's easy for him. i hope he doesn't get hurt. it might
be g-d's plan for something good.

@ruthie: Certainly wouldn't want to see him hurt. However, we can hope that it'll be harsh in the way that he'll learn a lesson of the sort his 2 prior run-ins with the law haven't.

...haven't taught him, that is.

So is he going to Otisville to keep SMR company?

I don't think he was found guilty of "blackmail" per se. The charge of blackmail is the threat to expose some person or entity and the use of that threat to obtain something in exchange. The information was not possessed by him but by an inmate and he offered to receive financial benefits for "assuring that the information would not be exposed." The other crimes I understand, but there's no way he could be guilty of blackmail or extortion.

@Maskil: You might want to read the trial transcript...

Yes, I would. If he was convicted (i.e. found guilty and sentenced) for blackmail or extortion then there is a perversion of justice and heavy grounds for an appeal on those counts. According to all media reports he did not threaten to expose any unwanted information but rather offered to use his influence to keep a third party quiet in exchange for financial benefits. This is not blackmail or extortion and it is not illegal. Either the journalists covering the case did not understand the charges or they did not understand the crimes for which Balkany was found guilty. I do not dispute the other charges and his conviction is perfectly understandable with the other charges alone. But if you believe that he was found guilty for blackmail and extortion please direct me to the trial transcript.

I believe there's a link here on Failed Messiah. Also, would you be willing to share if you're a criminal attorney, or a layman?

this man should no longer be a rabbi.
but he's a damn good criminal.

The one lesson I've learned from years of dealing with Rabbi Balkany is that the road to hell is paved/paid with good intentions.

The other thing I've learned is that while he started out by genuinely seeking to help others and would go the extra mile for anyone in need, his thirst for power and position has become intertwined and perverted by his need for kovod and overinflated ego.

I sincerely hope that the outcome of his trial will put the fear of god back into him and bring him back down to earth.

formerbasmelech... well said. brava

I find it fascinating how Balkany had to defend himself against extraneous, unproven allegations to such length at his sentencing. Was he fearful that prosecutors or the judge would try to enhance or magnify his sentence, as they apparently did with S Rubashkin, based on matters not charged at trial?

Of course he's guilty of blackmail and extortion. People weren't born yesterday. The jury knew exactly what he was trying to pull off and he was caught on tape.

@A E Anderson: He enjoys listening to the sound of his own voice. Need proof of that? Listen to the Zev Brenner interview.

I find it fascinating how Balkany had to defend himself against extraneous, unproven allegations to such length at his sentencing. Was he fearful that prosecutors or the judge would try to enhance or magnify his sentence, as they apparently did with S Rubashkin, based on matters not charged at trial?

Posted by: A E ANDERSON | Christchurch, New Zealand | February 19, 2011 at 03:54 PM

I find it fascinating that you have this disgusting habit of misstating the facts.

The "allegations" were not "unproven" – Balkany ADMITTED they were true. Th efeds agreed to treat his crimes are civil, not criminal, violations – as long as he made that admission and repaid the money he stole.

And the "allegations" were certainly not "extraneous," because they showed his prior bad acts and his very bad attitude – both of witch are germane at sentencing.

Read the VIN article and comments.

++According to all media reports he did not threaten to expose any unwanted information but rather offered to use his influence to keep a third party quiet in exchange for financial benefits. This is not blackmail or extortion and it is not illegal.++

Wrong. He threatened that if the financial benefits would not be forthcoming that the third party would not keep quiet. That is extortion and blackmail.

You simply don't know the law.

according to VIn readers a big tzaddik will be jailed.

Boy am i happy I left that mental asylum where a crook is still called a tzaddik.

Another commenter laminated that 4 years is a long time for a yid he will miss holidays and simchas.

Wow does the guy really think only yids have holidays and simchas?

according to VIn readers a big tzaddik will be jailed.

Boy am i happy I left that mental asylum where a crook is still called a tzaddik.

Another commenter laminated that 4 years is a long time for a yid he will miss holidays and simchas.

Wow does the guy really think only yids have holidays and simchas?

Posted by: seymour | February 19, 2011 at 09:43 PM

When I responded tot the person who called him a tzadik by saying,"He is not a tzadik in any shape or form. Calling him such is an outrage". When I pressed the button to post it, it said my comment would have to await approval. My comment was never posted. They are protecting him look what Zev Brenner said about this incident. He felt bad even after Balkany brutalized his own radio show.

balkany never thought he would end up in jail. he's been doing this for years and years....
and years.
i bet he makes more money in jail. the guy is really good at what he does. not kidding.

When I responded tot the person who called him a tzadik by saying,"He is not a tzadik in any shape or form. Calling him such is an outrage". When I pressed the button to post it, it said my comment would have to await approval. My comment was never posted. They are protecting him look what Zev Brenner said about this incident. He felt bad even after Balkany brutalized his own radio show.

Posted by: Hadasah | February 19, 2011 at 10:18 PM


vin cannot have an honest discussion since they do what they did to your comment.

vin cannot have an honest discussion since they do what they did to your comment.

Posted by: seymour | February 20, 2011 at 10:49 AM

The previous stories about him had some people who said worse things than what I did. I made sure not to be offensive. Here are the rules on VIN. http://www.vosizneias.com/35800/

This comment is even more offensive and this poster cannot even spell:

Today at 08:44 AM
Netah Says:
I went to Rabbi Balkanys yeshivah over 20 yrs ago , he is a a pleasnt man always a big smile on is face. the only crime he commited is being a tzaddik and helping yiddisha children go to Yeshivah. this is a time for teshuvah bad things r happening around the world. we all must respect one another or mor ebad will happen. I pray there will be a miracle and Rabbi Balkany at his old age of 64 will not have to dread going to prison such an awful place to be, pray maybe they will lessen the charge to house arrest. Everybody Pray

There is no reason to post on vin anymore. They have become an impotent blog of retarts.

Yes I realized. I just thought that maybe I could be one of the few normal people on that incompetent blog. I did not write anything offensive. I did not say that he was a crook and deserves to be in jail for a lifetime I just said that he was not a tzadik. So screw me. The comments are funny to read because they are all morons.

Looks like VIN has become a puppet news blog since the proposed ban. It wouldn't be surprising to find out that all negative comments have been rejected.

I know Balkany personally. He is broken by what happened.
Sooner or later, we all get a mighty lesson in life.
To judge him in his sorrow and in his moment of "reality check' is not a Jewish trait.
Yes, we all want the bad guys to suffer and get put down. But YOU too one day will have to kiss the floor (this is true for the best people) and when that day comes, you will look around for those who don't carry bad judgement on you.
Instead of judging the guy, pray for him.
Give the wise a moment to think........

I know Balkany personally. He is broken by what happened.
Sooner or later, we all get a mighty lesson in life.
To judge him in his sorrow and in his moment of "reality check' is not a Jewish trait.
Yes, we all want the bad guys to suffer and get put down. But YOU too one day will have to kiss the floor (this is true for the best people) and when that day comes, you will look around for those who don't carry bad judgement on you.
Instead of judging the guy, pray for him.
Give the wise a moment to think........

Posted by: Nick | February 20, 2011 at 08:39 PM

He committed a crime and caused a huge Chillul Hashem. If you don't believe me read the comments on the Daily News article. I am not judging him I just said that he is not a tzadik.

I know him as well. Very well. He did a lot of good - that's undeniable. However, there's another side to the man that few are willing to acknowledge: his outsized ego. Judging him? This isn't a matter of judging him, this is a matter of a very prominent member of the orthodox jewish community - the frum community - committing a crime and basically saying, "I'm above the laws of man."

My personal judgment has no place here; in the eyes of the laws of man, he's guilty.

I would also like to point out that for someone who is so generous with other people's money, and didn't draw a salary from his school for 10 years still somehow managed to live like a king. Where did all that money come from, hmm? If that money flowed from his lobbying activities, shouldn't his first obligation have been to fund his school, pay his teachers and perhaps set a slightly less lavish table or the like?

it appears that rabbi b is in miami, wether on holiday or not am unable to give a definitive answer.wishing all a peaceful and meaningful Pessach

I know I'm late to write on this- but rabbi balkany is a good man. He helped numerous people, myself included,. Perhaps he made a mistake ( or was wrongly accused) but either way it was or the benefit of helping others. He had hundreds of homeless people of for the sabbath meals. If he did indeed " blackmail" somebody.. That isn't the right thing to do but hos many of us do the wrong thing, regret it and are unable to take it back. No harm was done.. No one was hurt. I hope he gets released soon.

Please.

The only reason no harm was done is that the feds arrested Balkany immediately.

He's a criminal with decades of shady behavior – including threatening behavior.

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