- Dalton and his crew must have found out about Case's collaboration with the Nazis somehow, and given the resources Case has clearly put into covering this up it wouldn't have been easy. A descendant of the families Case stole from, one who might have heard about Case from his parents, is one of the few avenues Case couldn't shut down.
- In addition, Dalton and his group clearly have a moral code (albeit a slightly wonky one). If the Rabbi was descended from the original owners of those diamonds, then he might be the "legitimate" owner of those gems, and his endorsement would give Dalton and Co a moral foundation for stealing them back from Case.
Dalton probably planned the robbery so that Frazier would be the Detective on it (coinciding it with the other Detective's vacation; and maybe he even knew about Frazier's troubles at work, which were also a reason his Captain "threw him a bone"). Dalton somehow knew of, or about, Frazier and admires the guy's smartness/attitude. Remember Dalton says "You're too damn smart to be a cop"; clearly he has a low opinion of cops, but respects Frazier as an exception. And knowing Dalton is the Magnificent Bastard he is, he wanted to have a "worthy opponent" during the robbery. Dalton was proud of how he "planned this to perfection", as he says, and of how smart he is; he clearly wanted it to not be easy, but a challenge—"Because I can".