Kosher plant chief Sholom Rubashkin sentenced to 27 years imprisonment

June 21, 2010

, which is headlined “Sholom Rubashkin to receive 27-year prison sentence,” reports on the severe sentencing outcome in a high-profile federal white-collar case out of Iowa. Here are the early details:

Sholom Rubashkin will receive a 27-year federal prison sentence on Tuesday for his leadership in the financial fraud scandal at Agriprocessors Inc., a judge declared today. U.S. District Judge Linda Reade will impose a 324-month prison term for the former eastern Iowa meat plant mogul, followed by 5 years of supervised release, according to a ruling filed this morning.

She also will order Rubashkin to pay $18.5 million to First Bank Business Capital, the plant’s largest lender; $8.3 million to MB Financial Bank, another lender; and $3,800 to Waverly Sales, Inc., which received late payments from the plant for cattle.

Rubashkin was convicted of 86 financial fraud charges last November for leading the scheme to defraud the banks. A South Dakota jury concluded at trial that Rubashkin had ordered employees to create bogus financial documents to collect advances on a revolving loan. The plan collapsed shortly after a May 2008 immigration raid at Agriprocessors in Postville, when the slaughterhouse plummeted into bankruptcy.

Reade rejected defense arguments that Rubashkin lacked the authority to stop the criminal conduct at the Postville slaughterhouse founded by his father. She cited 11 examples from his trial, including testimony that he directed employees to create false sales records, and helped illegal immigrant employees secure false work papers.

Rubashkin’s “degree of control and authority was close to absolute,” Reade wrote in the 52-page ruling. “He told his employees when, where and how to commit the various crimes.” Reade said Rubashkin lied at his trial when he testified that he never told employees to create fake sales records and customer checks. His testimony conflicted with former employee accounts that were more believable, she said.

She also rejected defense arguments for a lesser sentence because of his charitable work, his relationship with his 16-year-old autistic son, Moishe, and other family responsibilities. “Defendant devotes a substantial amount of evidence and argument to his contention that his offenses of conviction were not motivated out of a sense of personal greed, but rather, out of a sense of duty to maintain his family business for religious purposes,” Reade wrote.

“No matter Defendant’s motive, he defrauded the victim banks out of millions of dollars. He unlawfully placed his family business’s interest above the victim banks’ interest. His family business and he personally benefitted at the expense of all the victim banks’ innocent shareholders.”

She later added: “Additionally, it is entirely possible that a number of Defendant’s charitable deeds were funded with proceeds from his crimes. It is far easier to be generous with someone else’s money instead of one’s own.”

Prosecutors had asked Reade to impose a 25-year sentence. Rubashkin’s attorneys requested no more than six years. Defense lawyers said they plan to appeal Rubashkin’s conviction and sentence. “We believe that the sentence is greater than necessary,” said Rubashkin lawyer Guy Cook, of Des Moines. “It’s even greater than the government asked for. It’s unfair and excessive. It’s essentially a life sentence for a 51-year-old man, and it’s not in the public interest.”

Reade said she will read her sentence memorandum in federal court Tuesday in Cedar Rapids. Prosecutors and defense attorneys have scheduled press conferences afterward to speak about the case.

It appears that Judge Reade rejected virtually all of the defense’s guideline-based and non-guideline arguments for a lesser sentence for Sholom Rubashkin. It also seems that she wrote a very lengthy sentencing opinion to explain the exercise of her sentencing judgment. I will post that opinion when I can track down a copy.