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Saturday, November 14, 2009

Kosher slaughterhouse manager convicted of fraud

By Grant Schulte

SIOUX FALLS, S.D. — The former manager of a kosher slaughterhouse was found guilty on all but five of the 91 felony fraud charges he faced for his role in a massive bank fraud scheme at his former meat plant, Agriprocessors Inc., in Postville.
Jurors declared Sholom Rubashkin, the former vice president at Agriprocessors Inc. guilty of bank fraud, making false statements to a bank, wire fraud, mail fraud and money laundering.

Rubashkin also was convicted Thursday of 15 of 20 charges that he ignored an order to pay livestock providers in the 24-hour window required by law.

Rubashkin is the sixth high-level Agriprocessors manager convicted of federal charges, although he most likely will face the most severe prison sentence. The other five — two line managers, two financial officers, and the human resources director — all struck plea deals and testified against Rubashkin.

Rubashkin, 50, was taken into custody, despite protests from his lawyers. As federal marshals led him out of the courtroom, he turned and blew a kiss to his family and well-wishers.

Rubashkin showed little emotion as U.S. District Judge Linda Reade read each verdict, a process that took nearly an hour to complete. At several points, he turned and looked at his family. Once he looked down and shook his head.

His lawyer, Guy Cook, said Rubashkin will appeal after his sentencing at undetermined date in Cedar Rapids. The defense team also will push for his release on bail pending a second trial on 72 immigration charges that begins Dec. 2.

Rubashkin's wife, Leah, said she was not sure whether the family would remain in Postville, a town that has relied heavily on the kosher meat plant founded by the family patriarch in 1987.

"We know he's innocent, and we look forward to his appeal," she said on the courthouse steps. "Obviously, this is not a pleasant thing."

Rubashkin's children, who showed no emotion as Reade read the verdicts, said their Jewish faith would help their father.

"We're in God's hands, and it's going to be good," Getzel Rubashkin said.

Rubashkin's oldest daughter, Roza Weiss, said: "It's unbelievable. My only comment is, we're Jewish and we're proud of it."

Federal prosecutor Peter Deegan Jr. referred questions to the U.S. attorney's office in Cedar Rapids. A call to the office spokesman was not returned.

Deegan asked Reade to place Rubashkin in federal custody immediately because of concerns that he might flee. Rubashkin likely will face "a lengthy sentence," Deegan said.

The courtroom was half-full as the five-man, seven-woman jury returned. Aaron Rubashkin — Sholom's father, the family patriarch, and the plant's founder — walked in as Reade read the first charges, heard the word "guilty," and slid into a chair with a blank expression.

Federal prosecutors had offered Rubashkin a plea deal before the trial began. Rubashkin told supporters that he would not accept it because he was innocent, a family friend told The Des Moines Register on Thursday.

Rabbi Shea Hecht, chairman of the National Committee for Furtherance of Jewish Education, said Rubashkin's supporters urged him to take the offer, which would have included prison time.

Rubashkin had "moral problems" with the proposal and insisted that he had done nothing illegal, Hecht said.

The plea-deal conversation took place during a meeting with Rubashkin and his lawyers in Crown Heights, a Brooklyn, N.Y., neighborhood and Rubashkin family stronghold, Hecht said.

He said it happened shortly before Yom Kippur, a major Jewish holiday, which began this year at sunset on Sept. 27.

Cook, Rubashkin's attorney, declined to comment about the plea deal.

Hecht said Rubashkin's legal expenses — paid by a Brooklyn defense committee, of which he is a member — have exceeded $1 million.

Prosecutors alleged during the trial that Rubashkin falsified sales records to defraud the plant's St. Louis lender. The fake invoices and shipping papers created the illusion of sales that never happened and allowed Rubashkin to borrow more out of a $35 million credit line.

Rubashkin also allegedly diverted customer payments into the wrong bank account, when the money should have gone directly to the lender. Prosecution witnesses testified that he used the money for personal expenses and to keep the plant running.

Jurors weighed the case for 2 1/2 days after a nearly month-long trial that was moved to South Dakota because of intense publicity in Iowa.

They continued deliberations on Tuesday, were given Wednesday off in observance of Veterans Day, and reached the verdict at 4:35 p.m. Thursday.

Rubashkin still faces 72 immigration-related federal charges as well as state allegations that he violated child labor laws. The federal immigration trial is set to begin in December in Sioux Falls.

Schulte writes for The Des Moines Register