‘Sex Dungeon’ Shakedown Charges Revived in New Jersey

TRENTON, N.J. (CN) – A New Jersey appeals court revived extortion charges Tuesday against a man said to have tried to blackmail a money manager over allegations that he drugged, raped, and beat Playboy models.

Prosecutors say Robert Aloi threatened to go public with the allegations in late 2017 unless Howard Rubin, a former trader at Bear Stearns and investment adviser to George Soros, paid him about $10 million.

Rubin was once infamous for his connection to major losses at Merrill Lynch during the late 1980s. The married father of three took another hit to his reputation in November 2017 when two anonymous Playboy models brought a $27 million lawsuit in Brooklyn that accused Rubin of luring women to the penthouse apartment that he operated as a “sex dungeon.”

Over a month before that suit was filed, however, Aloi was arrested across the river in New Jersey. Prosecutors there said Aloi had told Rubin’s lawyer, whose office is located in Edison, New Jersey, that he would keep quiet about the sex dungeon in exchange for nearly $10 million.

Aloi, whose residence is in Maryland, managed to secure dismissal of the case on the basis of jurisdiction, but a three-judge appeals panel revived the charges Tuesday.

“Although the evidence showed the threats originated from [Aloi] while he was in Maryland, it was the attorney’s receipt of the threats in New Jersey through which [Aloi] completed the alleged attempt to extort [Rubin’s] property,” Judge Francis Vernoia wrote for the court.

Aloi’s attorney Eric Mark expressed disappointment in the ruling, saying the court “reached the wrong conclusion.”

“If this does go to trial there will be a lot of information about the attorney involved,” Mark said, referring apparently to Rubin’s attorney, Yifat Schnur.

“It’s not as clear cut as the facts presented to the grand jury make it seem,” Mark added.

Schnur was initially named as a defendant to the Brooklyn case, with the Playboy models saying she intimidated them and played a central part in Aloi’s conduct.

Prosecutors say Aloi first attempted to reach Rubin by contacting a New York charitable organization where he was on the board.

Schnur meanwhile recorded Aloi asking for a $9.95 million payment to his “No Fear Against Abuse” charity. Prosecutors say Schnur claimed he would receive only vehicles and office space while the rest of the cash would go to Rubin’s alleged victims.

Aloi allegedly dropped his asking price to $3.7 million but never followed through on a meet-up with Schnur that he had planned, after which he was arrested.

Rubin’s accusers implicate a number of the money manager’s associates in a cover-up, saying one offered the models free airline tickets and thousands of dollars to stay quiet.

One of the women in the suit claims Rubin beat her so badly her breast implant was damaged, while another alleges he threatened to “rape you like I rape my daughter.”

Apart from the federal case in Brooklyn, Rubin faces a second lawsuit in Manhattan Supreme Court by a young woman who says she too was raped.

This woman says Rubin made her sign a nondisclosure agreement and threatened to sue her for $1 million if she ever spoke about anything that occurred in Rubin’s penthouse. Before the other allegations against Rubin encouraged her to come forward, the woman says she tried to commit suicide in 2016. 

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