New York – 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.
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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.”
“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.”
Wow.
the scandals keep on piling up if Mashiach doesn’t come soon there will none of us left to save
Sorry Ben, but if that’s the defense you intend to use on the Rabbi’s behalf, you can stay home and watch the trial. You can try that “bad judgment” call on every civil crime and claim that the defendant lacked criminal intent. It won’t hold. Come up with a better defense; you still have time, Counsel.
Wow! This is what his defense lawyer is saying!
Why does ben brafman feel that he to say something,ans especially something that does not make much sense, he could say no comment, will meet you at trial,
Reply to # 2. And I am ashamed to read your comment .
Reply to # 5. Many, could possibly, be less than a hundred.
Reply to # 6 You are foolish . Counselling. Counsel Brafman .
I am in the inside of the case. It has nothing to do with the 4 million. There’s at lot more at stake for the hedge fund that could get a few very big names in serious trouble.
Believe me, they would have been glad to pay 4 mil if it guarenteed them immunity.
Wake up people and read between the lines- don’t be so gullible!
Ben’s comment doesnt sound to good….but i sure have faith in the Legal eagle!
What a chlliul hashem these r our rabbis we’re suppose toook up to?
Ben Brafman is brilliant. And if the Govt wants to test his brilliance, they will become a laughingstock because he will make them look bad. There is no way to get around the tapes, the witnesses, etc. But if he can convince the jury that the rabbi did not have the criminal intent necessary for extortion, he is not guilty. And when myriads of character witnesses get to the stand, the jury themselves will want to write checks to Balkany’s yeshiva.
GO BEN ! GO BEN ! SICK ‘EM!
(e) By extortion.
A person obtains property by extortion when he compels or induces
another person to deliver such property to himself or to a third person
by means of instilling in him a fear that, if the property is not so
delivered, the actor or another will:
(i) Cause physical injury to some person in the future; or
(ii) Cause damage to property; or
(iii) Engage in other conduct constituting a crime; or
(iv) Accuse some person of a crime or cause criminal charges to be
instituted against him; or
(v) Expose a secret or publicize an asserted fact, whether true or
false, tending to subject some person to hatred, contempt or ridicule;
or
(vi) Cause a strike, boycott or other collective labor group action
injurious to some person’s business; except that such a threat shall not
be deemed extortion when the property is demanded or received for the
benefit of the group in whose interest the actor purports to act; or
(vii) Testify or provide information or withhold testimony or
information with respect to another’s legal claim or defense; or
(viii) Use or abuse his position as a public servan
Why wasnt he charged with Attempted Extortion? The extortion statute states “when [defendant] compels or induces another person to deliver such property to himself or to a third person”
“Such property” in this case refers to the $3.25 million dollars. But Balkany wanted the money, not the paper checks. The fact that the money did not clear should bring the charge down to, at best, attempted extortion since the money was never delivered to him.
The govt should have let the money clear. The extortion charge should get dismissed.
the us legal system and laws not withstanding..
is this type of attempted extortion halachically permissable?
NO. 18. Character witnesses ; You mean , Characters.
Anyone who knows R’ Balkany knows that (assuming it is true) when he contacted the govt regarding the inmate who had information, it was not to get Cohen in trouble. He just wanted them sniffing around so that they would write the check. He never would have allowed the inmate to testify and put another jew in jail.
If he is guilty of these allegations, he is the actual moiser. Remember that he was threatening a yid. The allegations are so horrible. If he is guilty of the accusations, he does not deserve sympathy. Even if the money was to support Torah. No good can come from that kind of money.
I hope the charges are exaggerated.
Ben tried a similar defense for Plaxico. He pleaded it to the grand jury who didn’t buy it and then took a plea.
I am willing to wager 100:1 that the feds DO have a case against SAC. Of course at this time they are denying it.. so that the investigation can continue. I am afraid that now Balkany will be the Fed scapegoat, and may very well join his colleague in Otisville. in a year or so down the line, when the feds blow open the SAC scandal, Balkany will say “see, I told you so”… may appeal… bekitzer, the lawyers will make a bundle
“Azoi vee es cristels zech azoi yidels zech” Basically that means that we Jews mimic the non Jewish world. One would have thought that “Rabbi” Balkany would have learned his lesson when his picture was plastered on the front page of the NY Daily News. What a shonde! And yes there are many “frum” people sitting in jail–my friend’s husband was chaplain at Allenwood Federal Penitentiary (otherwise known as the country club) when Rabbi Kahane HY”D was there. There were so many inmates back then that they had glatt kosher food for the inmates and even had a hachnasas sefer Torah that the Jewish Press reported in their paper and this goes back to the mid 70’s. Oy Moshiach zoil shoin kumin !!!!
Number 22.Extortion hallachically permissible. Yes. in BP anything goes.
I work at SAC and I will be the first one to say that the guys here are ruthless when someone tries to extort them. You won’t be able to get a penny from them by trying to blackmail them and they will stick so many lawyers on you and go after you personally. If you’re planning to pick on a hedge fund, DON’T PICK ON SAC!
What have we come to – A Yid in prison for a Ponzi scheme and a Rav arrested for trying to shake down a hedge fund. Only in America.
Does it matter what the exact number of frum prisoners is? One is one too many.
if this is true – and who really knows…..if it is then i cant believe that this Rabbi was taken in by the convicted scammer/cheat/destroyer of jewish familes pathological liar Regensberg – makes you wonder… Jail is supposed to protect citizens from criminals….
It’s a pity that Elky price didn’t work for Balkany. She would have kept him in shape.
I know 3 frum inmates at Otisville- the number is between 30-40
It doesn’t matter whether Balkany is right or wrong. He is our brother attacked by hostile Jew hating goyim.
Whatever we do, goyim will hate us all the same.
Wake up, there is no fairness in American legal system. Whenever the courts lay their hands on a Jew, they throw the book at him – while a goy gets a slap on the wrist.
Don’t be a German of mosaic faith – realize who your brother is. POSHEI ISROEL ARE BETTER THAN NEVIEI UMOS HOOLAM ( kamtza and bar kamtza sugia).
Is there any reason why we have to keep Ben Brafman in business?
Lets get the Aguda to have 50,000 people call Otisville!
Otisville prison located in the Catskill Mountains that is known to have many observant Jewish inmates.
I they were observant Jews, they would not be in jail.
Before you know it, you will need to visit Otisville to see a Rabbi.
Did Balkany attend Ben’s speech this past summer about being erliche or was he busy with Klal work?
Now the rabbonim are going to have to make even more gatherings, to persuade people not to make Chilul Hashem. But then again, here the motives were to strengthen the learning in Torah Vodaath, so who can criticize.
Reply to # 57. Out of 37 frum yiden in oatsville prison , how many are ehrliche ?
# 57 u say 37 inmates out of a hundred
no way ottisvile has more than 750 inmates out of which approx 30 are shomer shabbos were not proud but keep the facts straight
It is a disgrace that even some of our Rabbis would stoop so low all in the name of money. It is even more of a disgrace that some of you can even rationalize that it is acceptable as long as the monies are going to Yeshivas or other charitable organizations. Our Jewish communities have come to worship only money regardless as to how it is obtained. I guess all these so-called ehrlicher Rabbis and their”farfrumpt “communities forgot about whom they are supposed to really worship and how they should behave. SHAME SHAME ON YOU!