Prosecutors Seeking Life Sentence In Kosher Slaughterhouse Case

Not only is Agriprocessors CEO Sholom Rubashkin standing convicted of defrauding a bank out of $26 million, but he was alleged to have hired illegal aliens in his business. Prosecutors are hoping to use the latter claims in pushing for a life sentence.

Sholom Rubashkin was never convicted of immigration violations and his attorneys dispute the allegations, but they still could be an issue at his sentencing hearing Wednesday on 86 financial fraud charges.

Prosecutors are seeking a life term for Rubashkin, who was found guilty in November 2009 of creating fake invoices to show a lender that the Agriprocessors Inc. meatpacking plant in Postville, in northeastern Iowa, had more money flowing in than it did. The charges followed a May 2008 immigration raid at the plant, where 389 workers were arrested.

In court documents defending their sentencing recommendation, prosecutors said the Social Security Administration had warned Rubashkin he was employing hundreds of illegal immigrants three years before the raid but that he did everything he could "to maintain his illegal underpaid workforce."

Defense attorneys argued that Rubashkin didn't have the authority to hire or fire the workers.

Former assistant U.S. Attorney William Mateja said U.S. District Court Judge Linda R. Reade could factor the immigration charges into her sentencing decision under a legal phrase called "other relevant conduct." Instead of trying and proving the charges against Rubashkin, Mateja said prosecutors need to meet a lower bar: a preponderance of evidence.

Interestingly, several other prosecutors have written letters calling on a far more lenient sentence and that a life sentence is out of line with the criminal conduct - white collar crime.

The shutdown of Agriprocessors (it declared bankruptcy in November 2008) caused a price spike among kosher meat products due to the fact that Rubashkin was a major national supplier.

Agriprocessors CEO Arrested On Bank Fraud Charges

Things are getting worse for Agriprocessors. The CEO of the embattled kosher slaughterer is under arrest for bank fraud.

Sholom Rubashkin was arrested Friday morning at his home in Postville, Iowa. He was being driven to Cedar Rapids for a hearing later in the day.

It's the second arrest for the former CEO of the Agriprocessors plant in Postville in less than a month. Rubashkin was arrested Oct. 30 on allegations that he helped illegal immigrants get fake documents.

The closure of the Agriprocessors facility is having an effect on the availability of kosher meat in some parts of the country, and higher prices are also widely expected.

Agriprocessors Seeks Bankruptcy Protection

One of the nation's largest kosher meat producers is seeking Ch. 11 bankruptcy protection. Agriprocessors, which produces kosher meat under the Aaron Rubashkin label and is sold at supermarkets nationally such as Albertson’s, Kroger, Shop Rite, Wal-Mart, Trader Joe’s, Ralph’s, Pathmark, and H.E. Butt, was the focus of an immigration and customs investigation that revealed 300 workers were illegal aliens. There were also allegations of child labor law violations, which were referred to the state's attorney general.

In its filing, the company blamed the May 12 raid:

The company says it owes between 200 and 999 creditors $50 million to $100 million, according to records filed in U.S. District Court. Agriprocessors lists assets of $100 million to $500 million.

The company's board of directors met Tuesday and decided to file for bankruptcy a day before a scheduled hearing on a lawsuit from the company's largest lender, First Bank of St. Louis.

First Bank alleged in a federal lawsuit Friday that Agriprocessors defaulted on a $35 million loan and overstated how much money it had available. The bank is seeking to foreclose on the Postville plant and appoint a third party to oversee the company's assets.

An affidavit filed with the bankruptcy petition says the bankruptcy will temporarily halt the lawsuit.

Plant owner Abraham Rubashkin stated in the affidavit that before the raid, the plant had annual revenue of more than $300 million and employed about 1,000 people. After arrests of about 389 people, the plant is down to 250 to 300 employees, Rubashkin said in the document.

Among the company's largest creditors are Jacobson Staffing Corp.on, of Des Moines, which Agriprocessors owes $845,000. The company owes $806,970 to Weyerhaeuser Paper Co. of Chicago.

This will have a significant effect on kosher food availability in some parts of the country and may lead to higher prices for kosher meat.