Federal prosecutors submitted a sentencing memorandum earlier this month to Judge Linda Reade in the case of disgraced Agriprocessors executive Sholom Rubashkin. Their recommendation: life in prison.
Rubashkin was the chief of the company’s Postville, Iowa packing plant in May 2008 when it was the target of a massive raid by federal immigration officials. Hundreds were arrested, the company was effectively destroyed, and Rubashkin became the target of a cascade of complaints and allegations: the massive hiring of illegal workers, abusive practices, drug and gun running operations, to name just a few.
But ultimately, Rubashkin was convicted of something comparatively prosaic: bank fraud. In November, a jury convicted Rubashkin on 86 counts.
(An interesting aside here: Nowhere in the sentencing memo do prosecutors use the phrase "life imprisonment," which led a spokesperson for the northern Iowa U.S. attorney’s office to claim, somewhat ridiculously, that prosecutors had only recommended that Rubashkin be treated "like any other criminal," a phrase they invoke repeatedly. What the memo does set forth is that Rubashkin’s crimes result in a total greater than 43, the highest level on the scale of federal sentencing guidelines, which would equate to life.)
Previously, Jewish leaders, particularly Orthodox Jewish leaders, had cautioned that Rubashkin not be convicted prematurely in a trial-by-media. Now that he’s been convicted by an actual jury, the focus has shifted to the sentence, and attracted attention far beyond the typical Orthodox circles that have been most exercised by the case to date.
Ironically, Rubashkin was not tried for hiring or mistreating illegal aliens. Instead, he was charged with financial crimes, including violating the obscure 1921 Packers and Stockyards Act, section 409 of which requires payment to cattle suppliers within 24 hours. In many cases, Rubashkin paid his vendors several days late. In a detailed sentencing memorandum, the prosecution points to 31 cattle suppliers who were not paid within 24 hours—but were indeed paid. Specifically, on page 25 of the memo, prosecutors assert, “The actual loss to each Packer’s Act victim is attributable to the fact that they all lost the time value of their money while they were waiting for payment.” As an example, the government sentencing memo declares, “Waverly Sales, Inc. has quantified the amount of their actual loss to be $3,800.51. This is based upon the amount of interest Waverly paid on a mortgage loan it took out on its property in order to cover the cost of the cattle sold to Agriprocessors while it was waiting for payment through the Packer’s trust.” As such, Rubashkin is to get a life sentence in part because his supplier lost interest waiting for full payment, which was actually made, but made days late. Indeed, this is the first criminal prosecution under the 90-year-old Packers and Stockyards Act any legal expert contacted could remember.
Prosecutors also discovered that Rubashkin inflated his original receivables to secure a bank loan; even though no losses were incurred, the exaggeration constituted federal bank fraud. Moreover, when Rubashkin routinely checked off a box on the original application, he swore his firm was not involved in illegal activities. That statement was deemed false by virtue of the illegal aliens working at the plant. The government has claimed that the bank lost $26 million when Agriprocessors defaulted on its loan. Such a high loss forces the federal sentencing guidelines up. The more money lost in a fraud, the more years the guidelines suggest. But further inquiry shows that the bank in question actually made $21 million in interest since Rubashkin paid down his $35 million line of credit—on time every time for years. Agriprocessors, says Lewin, only went bankrupt after the government’s massive raid, compounded by threats to prosecute prospective purchasers if they employed family members who offered to continue running the business, and an original indictment on 3 counts that was amended by six major superseding indictments. New indictments were filed every few weeks for about seven months until the seventh indictment recorded a staggering 163 counts. When the thriving business with a built-in captive kosher market was forced into bankruptcy, all sorts of multi-million-dollar purchase offers were rejected by the bank until the business failed completely. At that point, the bank indeed lost $26 million in what Lewin and other defenders see as an artificial self-created loss that served to intensely escalate the sentencing guidelines.
Former federal judge Paul Cassell called the government’s sentencing demand “irrational and unjust.” Cassell, who wrote a 70-page opinion on another inordinate sentence stated, “The six-year number is in the ballpark. Life is what you get for first degree murder. This is a longer sentence than for second degree murder or rape of child.”
Reade is slated to sentence Rubashkin later this month.