Former Agriprocessors Exec Tells Court He Was Paid In Cash To Avoid Taxes

Defense attorneys batter witness in attempt to save Rubashkin.

Agriprocessors official testifies to getting cash salaries to avoid taxes
By JENS MANUEL KROGSTAD • Waterloo-Cedar Falls Courier

SIOUX FALLS, S.D. --- Defense attorneys of Sholom Rubashkin battled on Monday with a former Agriprocessors lead accountant who testified Rubashkin played a part in a multimillion dollar bank fraud scheme.

Mitchell Meltzer, a chief financial officer at the kosher meatpacking plant when he was fired in March 2009, testified he and four other employees received at least some of their salaries in cash to avoid taxes.

Meltzer said he also shifted expenses around to conceal purchases from the bank and created false invoices he and former financial officer Toby Bensasson called "tootsies."

When it came time to submit financial reports to the bank, Meltzer said Rubashkin had the final say on the numbers.

First Bank Business Capital sent the kosher meat plant four loan payments totaling $3.45 million after a May 2008 immigration raid resulted in the arrest of one-third of its workers.

"Sometimes he would offer changes, and they made them," he said. "He usually wanted more income."

Defense attorney F. Montgomery Brown hammered away at Meltzer, painting him as a dishonest man who stole money from the company and lied on his resume.
When Meltzer said he cashed a few checks as a favor to Rubashkin, Brown pounced.

"You kept the money," he said.

"Absolutely not," Meltzer responded.

"You fleeced the company, didn't you?" Brown said.

Brown quizzed him on why his Facebook page indicated he was Agriprocessors chief financial officer for more than 12 years, even though he only held the title from November 2008 to March 2009.

Brown followed up by suggesting he had a reputation for exaggeration in the community, and prosecutors offered the last of many objections during the line of questioning.

"Let's not argue during questioning; let's move on," U.S. District Judge Linda Reade said.

Two high-level employees of companies that bought most of their kosher meat from Agriprocessors said they refused to pay some bills because the plant's invoices didn't match their records.

Albert Barel, controller at Los Angeles-based City Glatt, said when the trustee of Agriprocessors in January called bills from 2007 and 2008 past due, his company balked. City Glatt asked for proof of delivery, but the plant could not produce any records.

"We saw there were a lot of invoices not in our records, so we did not pay," he said.

Steve [Tzvi] Cohen, president of Twin City Poultry, offered similar testimony.

He said none of the invoices from November 2007 to October 2008 obtained from Agriprocessors showed up in his company's records.

Government lawyers presented their first witness for charges Rubashkin violated a 2002 federal order to pay cattle providers within 24 hours of a sale.

Prosecutors used a 1921 law, the U.S. Packers and Stockyards Act, for the charges. It is the first time in history criminal charges have been sought under the law.
Adam Fast, a senior auditor in Des Moines for the U.S. Department of Agriculture, testified Rubashkin certified an annual report in 2002, the same year Agriprocessors allegedly failed to pay for livestock in a timely manner.

On cross-examination, defense attorney Guy Cook said Rubashkin's name did not appear in the complaint, and in a consent agreement resolving the case Agriprocessors did not admit to any of the allegations.

Comments

[Max]

A company with $300 million in sales and they're paying top employees some of their salary in cash to avoid taxes. Did they do the same thing with some of the mashgichim? Weren't they top employees as well?
Old Russian proverb: A fish stinks from the head down.

[Isa]

Only reason to pay cash is to give employees a 'raise' that is tax free, otherwise regular pay via a check can be deducted off Agri's taxes

[itchiemayer]

Isa - it saves the company from paying payroll taxes and 401k/retirment. Leaves more money for SMR's salary, which is also a deductible expense....

[formerpostvillian]

Both Shochtim and Mashgichim were off of the books when I worked there. That money was routed through the certifying agency's in New York. Most "Rabbi's" were Israelies that were glad to be paid off the books so as not to pay taxes.

Then they would run down and apply for food stamps and any other "entitlements" they could qualify for.

[neighbor girl]

www.crownheights.info
has an "eyewitness" account of the opening days of the Rubashkin trial. Of course, this version portrays SMR as the persecuted victim.

[FirstGenerationBavarianAmerican]

You can get directly to the article Neighbor Girl found by going here:
http://www.crownheights.info/index.php?itemid=22043

As I have done here many times before, I claim this article is merely a fund raising solicitation. All these sob stories include an address where you can send your hard-earned money to.

About bad loans by banks, lets say some guy goes to a bank to take out a loan to fund 90% of the cost to start up a chain of record shops that sell only German Schlager music (he put up the other 10% himself in cash.) He gets the loan and builds the chain, but the average take per store in sales in $60 per month. The guy goes bankrupt. Was there any fraud involved? No, because there was no track record to see if starting a chain of German Schlager music record stores in the US was a lost cause.

Why the bank fraud charges? My guess is that someone at the bank got mad and wants to "claw back" money from the Rubashkins that they are prevented from doing by the bankruptcy filings. If they can prove fraud, they may be able to hang a sign at a meat market on 14th Avenue in Brooklyn that reads: "First Bank Kosher Meats, Under New Management."

[Shmarya]

The actual article is published on COLLive and was stolen (without attribution) by CrownHeights.info:

http://collive.com/show_news.rtx?id=5993

Past that, one of the reasons it is so important that I go to as much of the trial as possible is to have someone there who knows Chabad, knows Rubashkin and knows the case reporting.

Chabad has people in the court room every day.

Postville does not, the workers do not, the deported do not, and you do not.

If more money comes in, I could go to the trial multiple times, staying for a day or two or three each visit, perhaps.

As it now stands I can go one time for a day or two, so I have to choose that time very carefully.

The only Jewish media reporter who knows the case is Popper from the Forward, but the Forward under Jane Eisner is not the Forward under previous editors, and Popper is not at the trial.

Ben Harris of the JTA is on a one year bike tour.

I should have been there every day or at least most days.

But going to a place like Sioux Falls costs money. No one goes there for leisure or to stop there on the way to California or New York. It takes special effort to go, and that means no discounted airfare, hotels cost more than they should, and nothing is cheap.

$5,000 to $7,000 probably would have covered the cost of the entire trial if I went every day, perhaps $12,000 for both federal trials combined.

Some readers really seem to think I should absorb those costs.

But, as I said in my appeal for funds, I won't do that.

So I'll go for a day or two sometime during this trial or the next, unless more cash comes in.

[Yosef ben Matitya]

Most "Rabbi's" were Israelies that were glad to be paid off the books so as not to pay taxes.
The Israelis often are II's (illegal immigrants) no different than the Samoans and the Guatemalans.

[Yosef ben Matitya]

oy, oy is meltzer a moyser?
or maybe it's ok to moysren such creeps?

[A. Nuran]

Isa, what it is is tax evasion. And a felony.

[Isa]

Well, I guess after all the trials are through the IRS will swoop down and take what is left

[Hometown Postville]

Isa- only if they can find anything. I would guess any real profit is long gone hidden somewhere across the ocean.

[Krewz]

HP,
I don't think there is any
...real profit.. hidden somewhere as they would have spent it already on trying to keep the company afloat, and/or use it for legal defense.

[WoolSIlkCotton]

Wrong, Krewz.

The Rubashkin Crime Family likes to spend other people's money. That's why they rely on loans, government grants, schnorring, not paying their bills,and screwing people.

No Rubashkin has sold their house or compromised anything in their personal life styles. Rubashkin Family money will remain safety tucked away in a far, far location.

[Krewz]

have you been following the news, or you missed the part where it was reported that Sholom Rubashkin cashed in his life insurance policy!!?

"No Rubashkin has sold their house or compromised anything in their personal life styles.

1. unless you know the rubashkins how can you say they dint change their life style?

2. those that the family "relied" on, who sold their house?

[effie]

Why the bank fraud charges?

The government filed the charges, not the bank. And they did so because the company committed bank fraud.

[state of disgust]

If the loan agreement called for money from clients to be deposited in the St. Louis bank's corresponding bank, but was diverted by AGri into the accounts of the Postville Jewish day-school and and the Postville Kosher Grocery Store and then sent to the corresponding bank - less money needed by these institutions, that would be bank fraud.

Rubashkin claimed that his clients were slow payers. This allowed him to illegally and deceptively draw down more funds from his line of credit then would otherwise be allowed.

[state of disgust]

In essence, it is alleged that SMR and others at Agri misused the bank's money by giving themselves a loan that was not authorized by the bank.

[Hometown Postville]

Hey! Whatever the real story is,it's enough to get all of US twisted in knots with our speculations! And it's implied that the SMR follies were the result of an inexperienced do-gooder with sloppy bookkeeping? Sounds like pretty creative strategy to me.