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New York Court Sentences Rabbi to Four Years in Prison

In a case that garnered widespread publicity, Milton Balkany, a Brooklyn, New York rabbi, received a four-year federal prison sentence for extortion. U.S. District Court Judge Denise L. Cote found that Balkany, 64, dean of the Bais Yaakov day school, had tried to extort $4 million from hedge fund SAC Capital Advisors, LP.

Despite the dollar amount involved, Judge Cote imposed a sentence of 48 months, well below the 87-108 months suggested by the sentencing guidelines. Citing Balkany’s “lifetime of good work” and “generosity of spirit,” Cote nevertheless voiced concern that “the defendant has never come to terms with any of his criminal violations of the law.” Balkany must also serve three years of supervised release.

Balkany had contacted SAC’s attorney and threatened to disclose alleged insider trading in 2004, unless SAC agreed to pay his school and another school $2 million each. The attorney recorded Balkany’s phone calls and meetings, and Balkany was arrested after receiving two SAC checks totaling $3.25 million. Despite his statements about insider trading, no evidence regarding such trading was disclosed at trial. He was convicted by a federal jury in November 2010.

Balkany told the judge at sentencing that he was the father of 13 children and grandfather of 35, and used his money to help the poor and forgotten; he also noted that his schools accepted poor children rejected by other institutions. He denied any other wrongdoing beyond the extortion charges.

For example, Balkany rejected claims that he had tried to bribe federal officials for better treatment of Jewish prisoners. “I never gave a toothpick to a public official in my life,” he said.

Judge Cote ordered that Balkany be taken into custody at his February 2011 sentencing hearing, citing concerns that he may flee if he remained free on bond. See: United States v. Balkany, U.S.D.C. (S.D. NY), Case No. 1:10-cr-00441-DLC.

Sources:, Village Voice, New York Post

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Related legal case

United States v. Balkany