Postville-Area Business Owners Testify About Doing Business With Agriprocessors, Rubashkin

An eastern Iowa cattle-auction owner who sold livestock to Agriprocessors blamed the plant today for late payments that placed his business and employees at risk.

Postville-area business owners tell how Agriprocessors hurt their operations 
BY GRANT SCHULTE • Des Moines Register

Cedar Rapids, Ia. – An eastern Iowa cattle-auction owner who bought livestock from [sic – should read, "sold livestock to" – Shmarya] Agriprocessors, Inc. blamed the plant today for late payments that placed his business and employees at risk.

Ronald Dean, a co-owner of the Waverly Sales Company, told a federal judge that he was forced to borrow $194,000 from a bank to offset the late payments from the Postville kosher meatpacking plant. The mortgage was used to pay ranchers who had brought their livestock to auction.

“Otherwise, we would have gone under,” Dean said at the sentence hearing of former plant executive Sholom Rubashkin. “Several people would have lost their jobs. A lot of people lost trust in the meatpacking companies because of this.”

Another co-owner, David Beyer, said their cattle-sales business was reimbursed after a five- to seven-month wait, as the plant moved through bankruptcy proceedings. Nine full-time employees and their families were left in limbo until the case was resolved, he said. The company also had to pay $3,700 in interest on the loan as well as attorney fees, he said.

“It was a lot of sleepless nights, wondering whether your employees are going to have jobs – whether you’re going to have a job,” Beyer said.

Dean and Beyer were called to make victim-impact statements related about the massive financial fraud scheme at Agriprocessors, Inc. that included fake sales records, lies to bank officials and late payments to cattle suppliers in violation of the law.

Rubashkin was convicted of 86 financial fraud charges in November, and faces a potential life prison sentence. Defense lawyers have asked for a sentence no greater than six years. Prosecutors are asking for sentence that puts Rubashkin behind bars for the rest of his life.

Judge Linda Reade is expected to hand down a sentence in three to four weeks.

The South Dakota jury that heard Rubashkin’s case found him guilty of 15 of the 20 late-payment charges alleged by prosecutors. Prosecutors argued at trial that Rubashkin deliberately delayed the payments to create a cash “float” that kept Agriprocessors in business.

Dean and Beyer gestured toward Rubashkin when they spoke, but neither mentioned the former meatpacking executive by name. Victim impact statements are designed to influence a judge’s sentencing decision; they are not given under oath.

Agriprocessors Inc. was the site of a May 2008 immigration raid that led to the arrest of 389 illegal workers. The plant filed for bankruptcy after its lender, the St. Louis-based First Bank, filed a lawsuit alleging fraud.

Abe Roth, a certified public accountant and Rubashkin friend, testified today that bank officials failed to provide “extensive due diligence” when they fronted the plant an additional $5 million to keep the operation afloat after the raid.

“They’re supposed to do extensive due diligence,” Roth said. “When you do (that kind of) financing, you’re dealing with a company that has already gotten into trouble.”

Assistant U.S. Attorney Peter Deegan Jr. countered on cross-examination that the $5 million to keep the plant operating was made before bank officials realized that $10 million to $12 million in purported sales were fake.