A Brooklyn rabbi has been convicted of trying to extort $4 million from SAC Capital Advisors founder Steven Cohen.
A jury took just five hours to convict Milton Balkany of extortion, blackmail, making false statements and wire fraud. He faces up to 20 years in prison when he is sentenced on Feb. 18.
According to prosecutors, Balkany warned SAC that an inmate he was counseling claimed that he had information implicating SAC in insider trading of six securities in 2004 and 2005. He allegedly promised the hedge fund giant the inmate’s silence in exchange for a pair of $2 million donations to two Orthodox Jewish schools, including Brooklyn’s Bais Yaakov, where Balkany served as dean.
After going to the authorities, SAC played along, delivering the checks to Balkany. Unfortunately for the rabbi, the Feds were recording everything and arrested him the day he tried to deposit the hedge fund checks.
“We are obviously disappointed by the verdict, but confident that the court will ultimately recognize a lot of the good that Rabbi Balkany has done throughout his life,” the rabbi’s lawyer, Benjamin Brafman, said. Brafman is also no doubt disappointed that the jury did not buy his argument that his client should not be punished for “a stupid plan” and “using bad judgment.”
Balkany remains free on bail until his sentencing.