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NY rabbi convicted of extorting Conn. hedge fund

November 10, 2010

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NEW YORK—A prominent Brooklyn rabbi has been convicted in a scheme to extort a Connecticut-based hedge fund into paying millions of dollars to two schools.

Rabbi Milton Balkany was found guilty in Manhattan federal court Wednesday of extortion, blackmail, wire fraud and false statement charges.

Prosecutors say the 64-year-old Balkany threatened and lied to workers at the unnamed hedge fund to persuade them to send him checks totaling $3.25 million. They say he told them he was a spiritual adviser to an inmate who had knowledge of insider trading connected to the hedge fund.

Information about Balkany's lawyer was not immediately available. Balkany faces up to 20 years in prison on the wire fraud count at his sentencing Feb. 18.