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NY Rabbi Caught Up with Hedge Funds, Found Guilty

Reuters

An Orthodox Jewish rabbi director of a Brooklyn, New York, religious school was found guilty by a jury on Wednesday on charges of trying to extort $4 million from SAC Capital hedge fund billionaire Steven Cohen.

The jury in U.S. District Court in Manhattan reached their verdict against Rabbi Milton Balkany in five hours of deliberations after a trial that began on November 1. Balkany was charged in February with extortion, blackmail, wire fraud and making false statements in an attempt to force Cohen to donate to his school.

Judge Denise Cote ordered Balkany’s bail conditions and travel restrictions to remain in place until Monday, when he will be required to begin wearing an electronic monitoring device and be confined to his home. Balkany’s sentencing was scheduled for February 18.

“I am pleased to be leaving the building with my client and we will continue to litigate important issues in this case,” the rabbi’s lawyer, Benjamin Brafman, told reporters.

Brafman said at the time of Balkany’s arrest that his client used bad judgment and did not act with criminal intent.

Allegations that first appeared quietly in the court record of Balkany’s criminal case led to news last week that another hedge fund, FrontPoint Partners, might have traded on inside information.

Last week, U.S. prosecutors charged a French doctor, Yves Benhamou, with giving inside information to FrontPoint. Authorities charged Benhamou with tipping the hedge fund about negative results from a clinical trial that biotechnology firm Human Genome Sciences Inc was conducting for an experimental treatment for hepatitis C. The clinical trial took place in late 2007 and early 2008.

The hedge fund has put one of its top healthcare managers, Chip Skowron, on leave and said it is cooperating with authorities.

The rabbi made claims about improper trading by Skowron and FrontPoint in telephone calls with an investigator who was looking into the allegation Balkany was trying to extort money from Cohen. Prosecutors said Cohen did nothing wrong.

Transcripts of the calls were included in Balkany’s trial record and partial recordings were played to the jury.

The case is USA v Balkany, U.S. District Court for the Southern District of New York, No. 10-441.

33 Comments

  • 2. ceo wrote:

    he’s gotten in trouble in the past as well, I think, no?
    #1 said it right.
    Nebach that he did this to us. We take the hit for all this.
    HASHEM YISHMOR.
    Enough of it all. WHY

  • 3. dont believe everything u read... wrote:

    after the rubashkin crazy twisted story- i find it hard to believe the media with these kind of stories- im sure theres a lot more to it and i dont buy anything seeing how they can skillfully portray a tzaddik as a criminal…

  • 4. Milhouse wrote:

    #1. Let’s leave aside the question of guilt or innocence. Let’s assume, just for a moment, that the jury got it right, the allegations were 100% true, and he did everything they say he did. Have you consulted a rov competent in Choshen Mishpat, or looked it up yourself, to find out whether there’s anything wrong with it? How do you know whether that’s the case? Which siman and se’if in Choshen Mishpat bans what he was convicted of doing?

    (If all you have to come back with is the tired old refrain of “dina demalchusa dina”, don’t even bother. Start with translating the word “dina” properly. No part of that phrase creates an obligation on anyone to do anything, or a prohibition against anyone doing anything. It is purely a rule in dinei momonos.)

  • 5. disgrace wrote:

    giving tzedoko is a mitzva. stealing millions and giving lots to tzedoko is evil and wrong. disgrace!

  • 6. Open Your Eyes wrote:

    I’m sorry, but the fact is Rubashkin did commit crimes. The scandal is how the case was handled by the judge, his deplorable jail conditions, and his inappropriate sentencing. Here’s a great idea frum Yidden, don’t commit crimes in the first place and you will have no problem defending yourself later. These things are not fabrications and you are fools if you believe that they are.

  • 7. tzaddik wrote:

    Hatzaddik Rabbi Balkany is S M Rubashkin’s brother in law
    please,don’t say anything against him
    you do not have the all PIcture

  • 8. Whats the big deal wrote:

    Big deal. Even if true that he thretened to report an illegal act if he didn’t give charity to his school. So what?

    I always tell my neighbor if you don’t stop the noise I’ll call the cops – unless h invites me to the party.

  • 9. do not judge your fellow jew. wrote:

    comment number 3 said it right! easy to blame someone. noone is a tzadik and everyone does their own shticks!

  • 10. To #3 wrote:

    Let’s call a spade a spade and call a crime a crime. Balkany was convicted by a jury and was given the opportunity to defend himself with one of the best trial lawyers in New York City. Can we just admit for once that a frum person may have actually committed a crime? How many more frum people need to go to jail for this community to understand that we have a real problem that we need to take care of?

  • 11. Dan Likaf Zechus wrote:

    Good for #3- finally someone with some sense.
    How can you beleive a twisted media???

  • 12. THINK ABOUT IT.............. wrote:

    so sad to say but their are lots of ppl out there who lie and cheat inorder to get more money from the gvt. Just because you didnt get caught doesnt mean that what u are doing is ok…….

  • 13. quasi chochom wrote:

    so let’s get the story right !
    i know someone made money illegally and wanted some of the money !
    i guess keep the criminals together and eventually the murderers will be the only one’s left !
    so it’s possible he got arrested because he was going to be killed !

  • 15. A Crown Heights mother wrote:

    DO NOT BELIEVE THIS! WHAT ARE WE TAUGHT? FOR A TALMID CHACHAM AND ERLICHE YID WE ARE OBLIGATED TO BE MELAMED ZCHUS.

  • 16. To Millhouse wrote:

    It is childish how you come onto these websites every time a frum guy gets arrested and assert that he was under no obligation to follow the law based on some torturing of the rule dina d’malchusa dina. More and more frum Jews are going to jail because they think they are somehow above the law, which is precisely the attitude you are advocating. Even assuming that you are correct about Jews not being obligated to follow the US criminal code, what would Balkany lose in his spiritual avodah by not committing extortion under US law (which is clear from the jury verdict)? Had he just obliged the US government, he would not have brought shame to our community and would be able to continue supporting his wife and children. Oh, and he would also spare himself up to 20 years of prison. Stop turning people like Balkany into victims when they brought this onto themselves and were not compelled to do so by the Torah.

  • 17. A new class for Yeshivas wrote:

    This case should be made into a course and taught in every Yeshiva. Crime for any reason is still a crime.

  • 18. BPYID wrote:

    to Millhouse and others…stop thinking like a giraffe, the bottom line is it is a MAJOR CHILLUL HASHEM!!!

  • 20. To all the self-righteous... wrote:

    Lashon Hara is also against the Torah.
    A little bit of ahavas yisrael and being “dan l’kaf z’chus” wouldn’t harm either…
    Whether Rabbi Balkany did anything right or wrong is up to G-d to decide – meanwhile, “Al tadin et chavercha ad shetagiah limkomo” – and you will never be in his shoes because no two situations are identical.

    #17 is 100% correct.
    The Yeshivas – all of them – should be teaching boys trades/skills/math and halacha of financial matters so they can feel confident that they can honestly support their families – and pay the exhorbitant tuition fees.

  • 21. there are two sides to every story... wrote:

    If he is guilty (not saying that he is), he’s a massur, he ratted on a fellow jew trying extort and benefiting himself monitarily….

  • 23. To #21 wrote:

    Thank you, good point. If anything, we should wish the greatest ill on Balkany who was intending to be mosser a Jew to non-Jewish authorities and has the din of a killer. Let him sit and rot in jail!!

    Oh wait, no. He is politically well-connected and he is frum. Let’s ignore clear halacha mandates for convenience … because we really love the person who halacha tells us to hate.

  • 25. TO #10 wrote:

    to number 10 i totally agree with you
    even if hes found guilty by the athoritys we still dont know if hes guilty according to torah…
    thats the problem nowadays

  • 26. auntie wrote:

    this guy is an empty jewish suit. He dresses like a Yid, but he’s not really being a Jew.
    how utterly pathetic. How does someone like that sleep at night and stand in shul and daven.
    and what does it to HIS own family and friends, and then to everyone else. there is not much I can think of to say except that we should learn to be better and watch our chldren and make sure we watch them and raise them to do torah and Mitzvos.
    HaShem yerachem.
    Will anyone ever see our finest? This is disgustingly embarassing.

  • 27. NK wrote:

    This is far from the first time that this man has been involved in illegal activity. If it happened, once then, yeah, we should be dan lekaf zechus. Twice – alright, we could still try. But more than that?

  • 28. Milhouse wrote:

    #16, you are clearly an am ho’oretz, so there’s no point in talking to you about learning. But this is a Lubavitcher site, is it not? So think back to our parents and grandparents in Russia; did they pay any attention to the law? The only attention they paid was to try not to get caught, but they certainly felt no obligation to obey it. Do you think they were less frum than us?! She’al ovicho veyagedcho; this is our heritage and our yiddishkeit. You do what you need to do, and if necessary pay lo yechratz gelt.

    You claim that many frum Jews are going to prison because of this attitude; so what? How does that prove anything about right and wrong? If someone took reasonable precautions against being caught, but had the misfortune to be caught anyway, then we should feel sorry for him; if his precautions were not reasonable, then we may feel that his misfortune was his own fault; but either way, how does it make him a bad person? How does he bring shame on us? At worst he is merely imprudent, like someone who lost all his money in a risky investment. How is that shameful? And how is it a chilul haShem?

    What is a chilul haShem is the spectacle of Jews condemning other Jews who have done nothing wrong al pi Torah, merely because they may have broken the goyishe law. Jews who have adopted the values of the nations who surround us, as if they came from Sinai, and as if every subparagraph of the US and state codes, and every local regulation or ordinance, were incorporated by reference into the Shulchon Oruch, if not the Aseres Hadibros. And those who measure what is a chilul or a kiddush haShem by “mah yomru hagoyim”.

  • 29. TREIF wrote:

    #28, ARE YOU JOKING, POEPLE LIKE YOU END UP IN OUR PRISONS, IM SURE THE GOV’T WOULD LOVE TO LOOK INTO YOUR ACTIONS. SHAME ON YOU, THIS IS THE WORST CHILUL HASHEM THIS JEW COULD COMMIT, AND EVERYONE, TAKE OFF THE RABBI PART, PEOPLE IN THIS WORLD HOLD RABBIS ON A HIGHER LEVEL, HE SHOULD ONLY BE CALLED MR. BALKANY., ALL HE DOES IS BRAG ABOUT HOW MANY PEOPLE HES HELPED AND HIS LARGE SHABBOS TABLE. WELL #28, IT’S EASY TO GIVE AND LIVE LIKE A KING WITH OPM., AND YOU ALL KEEP GIVING IT TO THEM

  • 30. NK wrote:

    Are you kidding, Milhouse? You think that because Jews in Russia evaded the Russian government’s laws means that it’s okay to commit crimes – as long as as long as they’re “goyishe laws”?

    Wow. You are seriously messed up.

  • 31. Milhouse wrote:

    #30, are you claiming that there’s some difference between Russian laws and American ones? Where in the Torah did you find such a distinction? Was there a new Torah given in America? Tell me, in which other countries does this new Torah apply? In which countries must we keep the law, and in which not? It’s so confusing.

    Did you forget that AMERIKA IZ NISHT ANDERSH?

  • 33. Milhouse wrote:

    #32, what a chutzpah. You’re the one making up a new torah that our parents and grandparents never heard of, and using it to attack a respected member of Anash, and to accuse him of chilul haShem, and when challenged you can’t prove your case. Either put up a defense of your position, or withdraw it and apologise. Enough indeed; enough of your ZIYUF HATORAH.

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