Former Agriprocessors executive faces more charges

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Saturday, November 15, 2008 8:34 AM CST
By JOSH NELSON, Courier Staff Writer

POSTVILLE — New federal charges against the former head of the Agriprocessors plant accuse him of diverting money destined to pay off more than $32 million in loans into two area businesses and later ordering employees to hide evidence of the scheme.

Sholom Rubashkin, 49, was arrested at his home 8 a.m., Friday morning on federal bank fraud charges related to his time as CEO and vice president of the kosher packing plant, said Bob Teig, a spokesman for the U.S. Attorney’s office.

Rubashkin, the son company owner of Abraham Aaron Rubashkin, was ordered to remain in custody until a hearing next week during a court appearance Friday. Rubashkin appeared in court wearing shackles at the ankles, waist and wrists.

The arrest comes one day after he was indicted by a federal grand jury on separate charges for conspiracy to harbor undocumented aliens for profit, aiding and abetting document fraud and aiding and abetting aggravated identity theft.

Court documents from that case allege Rubashkin approved a $4,500 loan to help plant employees get fraudulent work documents as immigration agents prepared for a raid.

Rubashkin entered into an agreement with First National Bank, a St. Louis company that issued the Agriprocessors a line of credit, to deposit customer payments into an account at the Decorah Bank and Trust. Instead, more than $16 million was shifted to accounts of two businesses in which Rubashkin was involved.

“Sholom Rubashkin did so for the purpose of inducing First Bank to extend additional credit, and advance additional funds, to Agriprocessors,” the documents say.

Approximately $10.6 million flowed through the Kosher Community Grocery, a small store owned by Rubashkin, from April 2007 to March 2008, according to court documents. Another $6.1 million in checks was written to the Torah Education Program of NE Iowa between April 2, 2008 and May 16, 2008, according to court documents.

Rubashkin later told employees in the accounts receivable department to deposit some of money back into Decorah account.

“Sholom Rubashkin instructed the interviewee to make sure that all the checks were for odd (seemingly random) dollar amounts, and that the combination of checks did not add up to a whole dollar amount,” the documents say.

Rubashkin was arrested on Oct. 30 for the charges related to immigration. After Rubashkin was released, he allegedly told an employee to “clean” his or her desk, which was interpreted to mean destroy or delete information related to the banking scheme.

First National filed a civil suit against Agriprocessors Oct. 30, alleging the company defaulted on a $35 million line of credit, according to court documents.

Last week, the company filed for Chapter 11 bankruptcy protection. The company says it owes $50.6 million to various creditors, including First National.

The plant has faced numerous problems following a May 12 raid by U.S. Immigration and Customs Enforcement agents. Officials arrested 389 people — mostly from Mexico and Guatemala — on various immigration and criminal charges. Since then, the plant as faced several fines for labor, safety and wage violations.

Federal Magistrate Jon Scoles ordered Rubashkin held until a hearing Wednesday, at which time the judge will decide if Rubashkin should be jailed until a trial.

Scoles also told Rubashkin that probation officers requested he be kept in custody because he allegedly destroyed evidence after an Oct. 30 hearing.

The Associated Press contributed to this article.

Contact Josh Nelson at (319) 291-1565 or josh.nelson@wcfcourier.com.

This entry was posted on Sunday, November 16th, 2008 at 11:44 am and is filed under Illegal Immigration, Worker Authorization, Fraudulent Documents. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

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Former Agriprocessors executive faces more charges