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.