Rabbi in SAC Extortion Plot Sentenced to 4 Years
Rabbi Milton Balkany
Ron Antonelli/NY Daily News Archive via Getty Images
Milton Balkany, a Brooklyn, New York, rabbi , was ordered to serve four years in prison for trying to extort $4 million from Steven Cohen’s SAC Capital Advisors LP.
Milton Balkany, a Brooklyn, New York, rabbi , was ordered to serve four years in prison for trying to extort $4 million from Steven Cohen’s SAC Capital Advisors LP. Photographer: Ron Antonelli/NY Daily News Archive via Getty Images
Milton Balkany, a Brooklyn, New York, rabbi, was ordered to serve 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 and blackmail charges after he threatened to disclose insider trading by SAC. There was no evidence at the trial that he had any such evidence.
“Just because you lead a charitable institution doesn’t give you a pass to commit extortion and fraud,” Cote told Balkany in court. “You tried to extort $4 million from a hedge fund.”
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 fund that a federal prisoner in Otisville, New York, to whom he was the spiritual adviser, had detailed the purported insider trading scheme to him. Balkany then called prosecutors in an attempt to put pressure upon SAC to further his scheme.
Cote agreed to impose a sentence less than the 87-to-108 months recommended by federal sentencing guidelines because of Balkany’s “lifetime of good works” and “generosity of spirit.” Eighty-seven people, including Alan Vinegrad, the former U.S. Attorney in Brooklyn, New York, wrote letters in praise of Balkany, Cote said.
Keep Quiet
In a 15-minute address to the judge, Balkany, the father of 13 children and grandfather of 35, said he used his money to support the poor, disabled and emotionally distraught. He said his school accepted poor children that other institutions rejected. He denied allegations by prosecutors that he previously committed other crimes, insisting that he followed the law and didn’t cut corners.
“For 10 years I did not take a salary because they did not have the money,” Balkany said of his school.
“We took our money and we gave it to the hungry and the poor,” he said of his family.
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.
Showed No Remorse
The lawyer instead recorded his phone calls and meetings with Balkany, who was arrested 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 authorities at a meeting scheduled for the following day. No such meeting was planned, according to the government.
In sentencing Balkany, Cote said she was particularly concerned about a recent interview he gave in which he said he was being punished by the government because of his decades of community service. Cote said that Balkany showed no remorse.
“The defendant has never come to terms with any of his criminal violations of the law,” she said.
The case is U.S. v. Balkany, 10cr441, U.S. District Court, Southern District of New York Manhattan).
To contact the reporters on this story: David Glovin in New York federal court at glovin@bloomberg.net; Patricia Hurtado in New York at pathurtado@bloomberg.net.
To contact the editor responsible for this story: John Pickering at jpickering@bloomberg.net.
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