Prosecution Details Late Payments For Cattle As Key Witness Stumbles

Late payments illegal under federal law but rarely prosecuted criminally.

Rubashkin prosecutors turn to new federal violation case
JENS MANUEL KROGSTAD • Waterloo-Cedar Falls Courier

SIOUX FALLS, S.D. -- During former Agriprocessors executive Sholom Rubashkin's third week on trial, prosecutors started making the case that he violated a federal law mandating buyers pay cattle providers within 24 hours of a sale.

The government alleges between February and April 2008, Rubashkin violated a 2002 order when the northeast Iowa kosher meat plant failed to make timely payments to livestock sellers.

Defense attorneys said they believe it is the first time in history criminals charges have been filed under the 1921 law, the U.S. Packers and Stockyards Act.
Prosecutors presented several checks from Agriprocessors to Equity Cooperative Livestock Sales Association, based in Baraboo, Wisc., that showed the plant frequently mailed a check several days after purchasing cattle.

The paper trail, which relied on Agriprocessors records and hand-written notes from Equity's office staff, showed Agriprocessors sometimes waited a few days to write a check, let a few days pass before time stamping the envelope, followed by another few days delay before receipt at Equity.

Wenda Slezak, credit manager at Equity, contradicted her affidavit to Packers and Stockyard investigators when she said the company offered Agriprocessors option to send check via pre-paid Federal Express package. In her affidavit, she said Agriprocessors paid its own postage for a U.S. Postal Service two-day delivery. Several jurors scribbled notes after she admitted the error.

The company's chief operations officer, Tod Fleming, said Agriprocessors sometimes made late payments, particularly after April 2008, but always paid its debts in full.

Fleming said despite the chronic tardiness, his company continued to do several millions of dollars of business every year with Agriprocessors.
Defense attorney F. Montgomery Brown suggested the company prompted the investigation by contacting the U.S. Department of Agriculture about late payments, even though it continued to benefit financially from the arrangement.

"It's kind of like calling in to Iowa State Patrol and saying, 'I'm following this guy whos going really, really fast.' And they say keep following him," he said.
Another executive at a livestock provider company, Waverly Sale Co., offered similar testimony.

Co-owner Ronald Dean said Agriprocessors, while sometimes late in payments, always paid its bills in full before its next purchase.

Comments

[critical_minyan]

as crimes go, prosecuting someone for violating the stockyards act is not a big deal.
the prosecutors should let sholom slide on this one.

[state of disgust]

critical_minyan:
By refusing the plea deal, SMR put ALL charges on the table and the government decided no doubt, to pursue everything. You never know what a jury or a judge - particularly in cattle country - will do. SMR decided to take a chance when he refused the plea. So did the prosecution.

[Pablo Faird]

SOD:
I seem to agree with CM on this one. Though you make a point in that by refusing the plea SMR put all charges on the table, however the prosecution should have used common sense on some issues this being one of them.

[rabbidw]

By prosecuting for a charge that has never been braught before, the government leaves itself open for a charge of selective prosecution and subsequent reversal on appeal. Yes, it is technically a crime, but it is overeaching and the chances are great that it will backfire. VERY BAD MOVE. I am an attorney. You try cases to win the case. You do not look to set a new precedent unless you have to.

[critical_minyan]

i can picture the true believers wrongly protesting for the next 20 years saying, "the government had nothing on him, they arrested him just cause he was jewish. the only crime that he was prosecuted for was something that nobody else ever was tried for before in the history of america."

[Yerachmiel Lopin frumfollies.wordpress.com]

I am inclined to agree that they are being unfair. In the end he always paid, just a few weeks late. I wonder how common this is for other slaughterhouses?

I also wonder if the feds sought this one out rather than there be a complaianant?

I wonder how many of the years of the potential jail sentance is due to each cow being an offense?

I also suspect that he would have gladly found someone to pay off these charges in a civil settlement.

On the other hand, there is a point of non-cooperation where it is customary practice to throw the book.

Most of all I feel that if the chareidi world says no plea deals that involve testimony, then accept the consequences. If it becomes customary to give a pass for not testifying because of religious rules, then non-jews will be justifiably angry. Yes people of all sorts of religions are entitled to accomodations (I notice he also got chol hamoed off-nice) but that cant turn ito different rules for different religions.

PS- what does he have to testify about? Isn't he the top man in the crimes?

Check out my blog for corruption in Israeli Chareidi halachah

[state of disgust]

Seems to me I remember (I could be wrong about this) SMR failed to pay cattle sellers in a timely fashion, then declared bankruptcy causing sellers to put in a claim to Feds, yielding a charge of violating the Packers and Stockyard Act. This isn't so much a case of selective enforcement as it is following the act exactly as it was intended to be followed and enforced.

[FirstGenerationBavarianAmerican]

IMNAL. But, I just re-read the Packers and Stockyards Act, and parts 201 through 206 of Title 9 of the CFR. That law has been brought up to date many times with allowances for extending credit, hearings with civil penalties imposed by the USDA, etc. Sellers have to file complaints under the act to retain their right to get paid under the trust fund provisions of the act. Everyone eventually got paid, but some sellers had to wait months for their money. This was the last in a series of posts here on the efforts to pay farmers and growers:
http://failedmessiah.typepad.com/failed_messiahcom/2009/01/livestock-sellers-to-get-2-million-in-agriprocessors-trust-payout.html

Like with prosecuting people who pass bad checks, the prosecutors will have to prove the defendant had no intention of paying the farmers and growers. The people heard from today got paid. The prosecutors will be able to get anyone who collected under the Packers and Stockyards Act to assert they did not get paid per the time schedule in the act.

[justice seeker]

As far as "not prosecuting this type of crime before" remember that west of the Mississippi we used to hang cattle thieves!

[Krewz]

good point Justice Seeker!

Thief (thēf)
One who steals, especially by stealth.

"Agriprocessors always paid its bills in full before its next purchase."

[FirstGenerationBavarianAmerican]

If Agri didn't, they would not be allowed to purchase again. We don't know if they asked the co-owner if he ever turned Agri buyers away because they did not pay for their last purchase. It must be awkward for cattle brokers/sellers to have to testify against customers.

[Shmarya]

good point Justice Seeker!

Thief (thēf)
One who steals, especially by stealth.

"Agriprocessors always paid its bills in full before its next purchase."

Please.

The head of GIPSA resigned rather than testify before Congress in hearings held in 2006, I think, into why GIPSA wasn't enforcing any regulations.

GIPSA is the federal agency in charge of regulating cattle sales.

The big slaughter companies were screwing small and mid-sized growers, and GIPSA turned a blind eye.

That's why there were no prosecutions after non-payment was made a crime.

Past that, if Rubashkin had not paid before ordering more cattle, no one would have sold to him. Why?

Because doing so could be read as waving the right to federal reimbursement for unpaid cattle – something also administered by GIPSA.

In other words, Rubashkin knowingly broke the law and did to small growers what he did to the bank.