ITWASSOOTED: Postville Iowa In ruins after Kosher Nostra Invaded

Tuesday, January 20, 2009

Postville Iowa In ruins after Kosher Nostra Invaded

Rubashkin faces 87 new charges, claims innocence

CEDAR RAPIDS — The attorney for Sholom Rubashkin said Friday his client denies the additional 87 charges filed against him late Thursday in U.S. District Court.

A fourth superseding indictment includes the previous 12 counts against the former CEO, Agriprocessors Inc. and three employees alleging aiding and abetting illegal immigrants, document and bank fraud and identity theft.

Rubashkin and Agriprocessors face an additional 86 counts of bank fraud, false statements and reports to a bank, money laundering and aiding and abetting and willful violation of the secretary of agriculture.

The remaining count is against former employee Hosam Amara for unlawful flight to avoid prosecution. The indictment alleges Amara fled to Israel in June.

"Sholom Rubashkin denies all 99 charges," Guy Cook of Des Moines, Rubashkin's attorney, said in an e-mail Friday. "Whether 99 charges or 9,000 charges, they are mere charges, proof of nothing. He is presumed innocent, and is indeed innocent, unless and until the prosecutors can prove the charges beyond a reasonable doubt in a court of law."

The court also granted Rubashkin an appeal hearing on his request for bail. He has been detained in the Dubuque County Jail since he was charged in November. The hearing will be at 4 p.m. Thursday. The prosecution has been against bail, saying Rubashkin is a flight risk.

The new indictment says the additional bank fraud charges involve Rubashkin, on behalf of Agriprocessors, sending false certifications to First Bank Business Capital regarding the company's compliance with laws and regulations. Rubashkin and the company knew of the hiring of illegal workers, it says. The certifications were sent numerous times, including every time Agriprocessors requested an advance under the loan agreement, the indictment says.

This indictment and the previous one contended that Rubashkin fraudulently diverted customer payments on accounts receivable. The more than $26 million in customer payments were diverted into different company bank accounts rather than into a depository account, as was required by the loan agreement.

To hide the diversion of the customer payments, which would have paid down the revolving loan if not diverted, Rusbashkin paid down the balance by making it look like they came from the customers, according to indictment. On several occasions, he made the accounting personnel take larger deposits and split them among two or more checks written in odd amounts.

Rubashkin also transferred funds to go through third party entities, such as Kosher Community Grocery Inc. and Torah Education Program of Northeast Iowa, both in Postville.

The false statements and reports to a bank, counts 28-69 of the indictment, and the money laundering, counts 70-79, stem from the bank fraud scheme when Rubashkin concealed the diversion of funds and deposited the money into third-party accounts, according to the indictment.

The willful violation of the order of the secretary of agriculture, counts 80-99, involves Rubashkin and Agriprocessors failing to pay the full purchase price of livestock as required by law and failing to deposit checks issued for the livestock in the mail before the close of the next business day after the purchase as required by law.
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