birdwatcher (birdwatcher) wrote,

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Brooklyn rabbi is charged with $4M hedge fund blackmail scheme‎ -

In a criminal complaint filed in federal court in Manhattan, prosecutors said that Mr. Balkany, 63, had recently been serving as a “spiritual adviser” to a federal inmate who told him that a Connecticut hedge fund had used inside information to profit from a number of stock trades.

The hedge fund was not named in the complaint, but prosecutors said that Mr. Balkany went to lawyers for the fund and told them that unless they handed over $4 million — $2 million of which would go to Bais Yaakov — he would instruct the inmate to tell the authorities about the insider trades.

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