Rabbi 'Pleads Guilty,' But Not To Blackmailing SAC's Cohen

Nov 3 2010 | 2:57am ET

In his client's defense, the lawyer for the rabbi accused of trying to extort $4 million from SAC Capital Advisors' Steven Cohen essentially pleaded guilty—in his opening statement.

Of the blackmail scheme Milton Balkany is accused of hatching, Benjamin Brafman told the jury, "He merely engaged in a stupid plan. You want to find him guilty for using bad judgment?"

"For that, we plead guilty today."

Brafman said Balkany sought the money from Cohen—in exchange for the silence of a Jewish felon who claimed to have proof SAC had been involved in insider trading in 2004 and 2005—because he knew Cohen was both Jewish and "rich."

According to Brafman, investigators, with SAC's cooperation, kept Balkany "coming back and talking, so that, eventually, they'd conclude he committed a crime."

The only problem with Brafman's argument, according to prosecutor Jesse Furman, is that Balkany did commit a crime when he tried to blackmail Cohen into donating the money to a pair of struggling Orthodox Jewish schools in Brooklyn, one of which Balkany served as dean.

Furman said they had Balkany on tape accepting the checks from a SAC lawyer—part of a sting operation—and assuring him that "Mr. Cohen and SAC were in the clear."

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