http://www.nynewsday.com/nyc-rabb082...headlines-left
The Associated Press
August 26, 2003, 4:13 PM EDT
A prominent Brooklyn rabbi was accused Tuesday of misusing a $700,000 federal grant intended for disabled preschool children, spending some of it on his own life insurance and credit-card bills.
The rabbi, Milton Balkany, asserted his innocence and plans to fight the charges, his lawyer said.
According to a criminal complaint unsealed by Manhattan federal prosecutors, Balkany applied for a $700,000 congressional grant to build a facility for educational and therapeutic programs for disabled preschool children.
The money was approved in 1999 by the Department of Housing and Urban Development. The facility was to be adjacent to Bais Yaakov, a Jewish day school in Brooklyn that Balkany directs, the complaint said.
But investigators said they later discovered Balkany had diverted the money -- including $300,000 to an Israeli company where his son-in-law is an officer and $5,000 to a New York import company where another son-in-law is president.
Balkany also used thousands of dollars of the grant money to pay his own life-insurance premiums, credit-card bills and his own federal income taxes, prosecutors said.
Outside court, Balkany lawyer Benjamin Brafman said the rabbi was innocent.
"People who know Rabbi Balkany will recognize that these charges are simply not true," Brafman said. "He has a reputation for being scrupulously honest. He did not personally profit in any way."
The rabbi surrendered to authorities Tuesday morning and was later released on $750,000 bail. He did not enter a plea, and U.S.
Magistrate Judge Gabriel W. Gorenstein set a Sept. 25 hearing.
Balkany, a 57-year-old Orthodox Jew, helped start Bais Yaakov 35 years ago and his been a respected lecturer, educator and community leader ever since, his lawyer said.
In 1986, he opposed President Reagan's decision to sell missiles to Saudi Arabia, and was one of 11 Jewish leaders invited to the White House to personally hear the president's argument.
He has also made campaign contributions to several Republicans, including $23,000 to former New York City Mayor Rudolph Giuliani's mayoral and U.S. Senate campaigns.