Witness: Rubashkin routed profits into plant instead of bank
BY GRANT SCHULTE • Des Moines Register
Sioux Falls, S.D. — A former top officer at the financially ruined Agriprocessors Inc. described a culture of fraud at the plant and poor oversight by its lender today as he testified against his old boss.
Yomtov “Toby” Bensasson, the self-proclaimed “traffic cop” of the meat plant’s accounting department, said former Agriprocessors executive Sholom Rubashkin, who is on trial for financial fraud, oversaw an elaborate plot to route profits into his company instead of the bank where money was supposed to go.
The former slaughterhouse controller told federal jurors that field audits conducted by First Bank Business Capital — the plant’s lender — were not as detailed as reviews he would have done.
The statement came in response to a question by Rubashkin’s lawyer about whether the reviews were thorough.
“By my standard, no,” he said. “I wouldn’t have done them that way.”
Bensasson testified that Rubashkin, the former vice president, believed that federal agents had bugged the meat plant and his phones. All conversations at Agriprocessors had to take place “on the move,” he said.
The northeast Iowa slaughterhouse that dominated the nation’s kosher meat market for years relied heavily on borrowed cash from Rubashkin family members, business associates and the bank Rubashkin allegedly cheated, Bensasson said.
Agriprocessors Inc. in Postville was the site of a May 2008 immigration raid that led to the arrest of 389 illegal immigrant workers, charges against top executives, and a bankruptcy claim that handed the plant to new owners. A Canadian businessman has since bought the plant and re-named it Agri Star.
Rubashkin has pleaded not guilty to 91 financial fraud charges including mail, wire and bank fraud, money laundering and failing to pay livestock providers in the time required by law. His trial is taking place in South Dakota because of intense media coverage in Iowa.
Rubashkin lawyer Guy Cook hammered Bensasson about the plea deal he struck with federal prosecutors in exchange for his cooperation. Bensasson pleaded guilty to one fraud conspiracy charge in August, although he admitted this week that he falsified company records to defraud First Bank.
“Good morning,” Cook said today. “Sir, do you want to go to prison?”
“Nobody wants to go to prison,” Bensasson said.
“You nevertheless have convicted yourself” of the conspiracy charge, Cook said.
“And you face a fine of as much as a quarter-million dollars, and restitution?”
“You pleaded guilty, convicting yourself?”
Today marked the end of Rubashkin’s second week of trial in U.S. District Court. Testimony resumes Monday.
Bensasson testified at one point that Rubashkin cashed in his own life insurance policy to keep the plant operational.
Bensasson said he agreed with Cook’s description of Rubashkin as a “well-intentioned man.”
Later, federal prosecutors raised the subject again.
“Mr. Cook asked you your opinion about whether he was a well-intentioned man,” said Assistant U.S. Attorney Peter Deegan Jr. “Do you have any opinion about whether he was a law-abiding man?”
Cook objected. U.S. District Judge Linda Reade agreed. Bensasson never answered.