Prosecutor: Rubashkin 'mastermind' behind fraud scheme
BY GRANT SCHULTE • Des Moines Register
Sioux Falls, S.D. – A federal prosecutor today in closing arguments described Sholom Rubashkin as the mastermind behind the enormous alleged fraud scheme and immigrant harboring that festered for years at his eastern Iowa meat plant.
Assistant U.S. Attorney Peter Deegan Jr. said Rubashkin’s claim that he did not know about the crimes was “ridiculous,” and urged jurors to convict the former Agriprocessors Inc. vice president of all 91 financial fraud charges presented during his trial.
Deegan pointed to testimony from many of the 50 or so witnesses and numerous financial records that he said paint Rubashkin as a liar who cheated his plant’s lender and ignored repeated warnings about the largely illegal work force.
“This case is very much about control,” Deegan said during closing arguments this morning. “The defendant’s control over money from customers. The defendant’s control over money for cattle providers . . . the defendant’s control over his workers. And finally, control over the bottom line.”
Rubashkin is charged with mail, bank and wire fraud, money laundering and ignoring an order to pay cattle providers in the time required by law. He has pleaded not guilty, and spent the last month in a Sioux Falls, S.D. courtroom battling the charges.
Defense lawyers will offer their closing arguments this afternoon. Prosecutors then get a final rebuttal before the case goes to jurors.
Deegan disputed Rubashkin’s assertions that he was not the plant’s top officer and did not make money decisions. He reminded jurors of several witnesses who described the 50-year-old as the boss at the plant who oversaw financial decisions.
He repeated worker testimony about a blue folder, marked “Sholom,” that held fake sales invoices which were allegedly used to defraud the plant’s lender, First Bank Business Capital. Prosecutors allege that the fake sales records were used to mislead the bank so Rubashkin could collect larger advances on a $35 million credit line.
The alleged fraud and immigrant harboring came to light after a May 2008 raid at the Postville meat plant that led to the arrest of 389 illegal workers. The plant sought bankruptcy protection the following November, which eventually led to new ownership and a different name, Agri Star.
Rubashkin knew about hundreds of illegal immigrants who worked at the plant as far back as May 2005, Deegan said. Elizabeth Billmeyer, the slaughterhouse’s human resources director, warned him in an e-mail that “someone could go to prison for this” but was ignored.
When Billmeyer refused to process any more fraudulent work papers, Rubashkin told two other human resource employees to hire the illegal workers at night and put them on a separate payroll, Deegan said. As a result, Deegan said, a federal informant who tried to infiltrate the plant without proper papers was unsuccessful at first.
Deegan scoffed at Rubashkin’s assertion that former plant controller Toby Bensasson ran the scam without his knowledge.
“It’s ridiculous,” Deegan said. “It’s a child’s excuse. He says Toby made me do it, and I didn’t know it was illegal, and even if I did know it was wrong, I didn’t think the bank would care."
Deegan added: “Everybody knows – a child knows – that you don’t make fake documents to get more money from the bank."
Rubashkin faces a maximum 1,280-year prison sentence if convicted of all the financial fraud charges. He also is expected to face 72 federal immigration charges at a second trial in December.
UPDATE 2:30 pm – Here's the report from the Waterloo-Cedar Falls Courier:
Prosecutor makes closing arguments in Rubashkin case
By JENS MANUEL KROGSTAD • Waterloo-Cedar Falls CourierSIOUX FALLS, S.D. - In closing arguments this morning, government prosecutors said former Agriprocessors executive Sholom Rubashkin committed massive financial fraud then attempted to conceal his crimes.
Prosecutors said Rubashkin, as chief financial decisionmaker at the Northeast Iowa kosher meatpacking plant, played a key role in the fraud - creating fake invoices, diverting customer payments, lying to a bank about being in compliance of the law - and the coverup and money laundering.
Rubashkin allegedly committed these acts to inflate his company's value so the bank would lend Agriprocessors millions of dollars it would otherwise not have been eligible for.
"This case is about control. Control of customers, control of money owed to cattle buyers, control of his employees and control over the bottom line," said assistant U.S. attorney Peter Deegan.
Before closing arguments commenced, it took District Judge Linda Reade about 90 minutes to read all 91 financial fraud charges, which carry a maximum penalty of 1,280 years in prison. Charges include bank, mail and wire fraud, money laundering and failing to pay livestock providers in a timely manner.
Deegan reminded the jury of an old friend of Rubashkin's who owns a business in New York. He said the testimony served as a clear-cut case of creating fake invoices, because Agriprocessors' records indicate it sent meat to a store that was later revealed to only sell men's clothing.
The judge explained the government has to prove Rubashkin knowingly committed fraud, but not the exact dollar amount.To that end, Deegan reminded the jury of several witnesses who said Rubashkin regularly asked Darlis Hendry, a sales coordinator, to create false invoices.
Deegan said Rubashkin incriminated himself last week on the stand by admitting he visited Hendry about invoices. He dismissed Rubashkin's explanation that the company controller, Toby Bensasson, told him to do it, and that he had no idea it was illegal or that the bank would care.
"It's a child's excuse: 'I didn't do anything wrong. Toby made me do it,'" Deegan said. "Even if Toby Bensasson is the mastermind and Rubashkin knows or helps, he's still guilty."
Deegan argued Rubahskin knowingly hired illegal immigrants at the plant because evidence, including e-mails and testimony, show Rubashkin knew about the problem for two years yet did nothing.
The government also alleges Rubashkin diverted money through several banks and the local kosher grocery store and Jewish schools to inflate sales and hide where money was coming from as he desperately tried to save the company from bankruptcy after a May 2008 immigration raid.
Closing arguments conclude this afternoon with the defense presenting its case.
[Hat Tip for the update: FGBA.]