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U.S. Attorney outlines evidence revealed during Rubashkin trial
By Rita Jane Gabbett on 6/23/2010
The U.S. Attorney's Office for the Northern District of Iowa detailed evidence presented during the fraud trial against former Agriprocessors CEO Sholom Rubashkin which resulted in the 27-year federal prison sentence handed down this week.
The sentencing concluded a two-year investigation stemming from a U.S. Immigration and Customs Enforcement (ICE) worksite enforcement operation at Agriprocessors' Postville, Iowa, plant.
In a news release, United States Attorney Stepahnie Rose detailed evidence presented at the trial that showed:
- Rubashkin inflated Agriporcessors' sales to fraudulently obtain millions of dollars in loans that were not backed with any collateral, resulting in over $26 million in lender losses.
- He committed money laundering by running tens of millions of dollars through bank accounts at a Postville grocery store and a religious school.
- Over two years, he funneled about $1.5 million from Agriprocessors' accounts to his personal bank accounts, using the money to pay credit card bills ($300,000), contribute to remodeling his residence ($200,000) , pay personal taxes ($76,000) and his mortgage ($41,000), make his car payment and monthly life insurance payments, and purchase jewelry ($25,000) and sterling silver ($20,000).
- Rubashkin was personally involved in illegally delaying payments to cattle suppliers and harboring hundreds of undocumented workers. He paid to purchase fabricated IDs and personally inspected those documents.
Rubashkin attorney disagrees
Rubashkin's attorneys have vowed to appeal both the verdict and the sentence.
In an interview with Meatingplace, Mark Weinhardt, one of Rubashkin's federal appellate attorneys, disputed the evidence that resulted in the guilty verdict and 27-year sentence.
Regarding Rubashkin's personal use of $1.5 million from Agriprocessors' accounts, Weinhardt said, "Mr. Rubashkin put extensive personal funds into Agriprocessors and we believe those Agriprocessors funds paid to him were repayments of loans or reimbursements of Agriprocessors' expenses."
Of the $26 million in lender losses, Weinhardt said Rubashkin "did not intend to defraud the bank out of any funds," and was "simply trying to keep a struggling business afloat."
In terms of Rubashkin's hand in fabricated IDs for illegal workers, Weinhardt said Rubashkin pleaded not guilt to all immigration related charges and "would have appreciated the opportunity to defend against those charges in a trial about immigration."
Immigration and bank fraud charges were split into two separate trials.
Separately, a jury found Rubashkin not guilty of any of the 67 charges of child labor violations that he faced in a state court case in Iowa earlier this month.
On appeal, Rubashkin's legal team will question the judge allowing extensive evidence about immigration charges to be presented at the bank fraud trial, which Weinhardt said, "We believe tainted the jury's view of the bank fraud case."
Weinhardt said he expects the appeal process to take about a year. According to the terms of this week's sentencing, Rubashkin would remain in federal prison during the appeal process, though he said the legal team may seek to have him released pending appeal.
Warning to other employers
United States Attorney Stephanie Rose, however, said justice was served by the verdict and sentence. "The house of cards he constructed finally was brought down. When something is built on lies, it should be no surprise when it collapses under the weight of those lies."
Claude Arnold, special agent in charge for the ICE office of investigations overseeing Iowa, cautioned other employers, "This case serves as a warning to employers that, if you build your business on the backs of an illegal workforce, ICE and other federal resources are there to make you pay the price," he said in a statement.