Prosecutors seek 25-year prison sentence, not life, for ex-Iowa kosher slaughterhouse manager

By Nigel Duara, AP
Thursday, April 29, 2010

25-year term sought in Iowa slaughterhouse case

CEDAR RAPIDS, Iowa — Prosecutors asked a federal judge on Thursday to sentence a former kosher slaughterhouse executive to 25 years in prison, less than the life sentence they have said they were entitled to request.

Former Agriprocessors Inc. manager Sholom Rubashkin, who was convicted of 86 counts of financial fraud in November, gave a tearful, halting speech at the end of his sentencing hearing in U.S. District Court in Cedar Rapids. He was charged following a May 2008 immigration raid at the former Agriprocessors slaughterhouse, where 389 workers were arrested on immigration charges.

Rubashkin told the court he had made mistakes and was remorseful. In a thick Brooklyn accent, he reiterated that he was sorry for his actions, and that he was put in a position by his family of running the operations of a large plant for which he had no training or interest.

“I’m basically a conflicted and flawed human being,” Rubashkin said. “Conflicted in that I allowed myself to be drafted into my family’s business against my wishes and better judgment.

“I basically should have stayed in teaching and being an emissary (for Lubavitcher Judaism.)”

Prosecutors had added up the charges in pre-sentencing documents and the total came to a life sentence. But assistant U.S. Attorney Pete Deegan said Thursday in court that the government would seek 25 years and not life, which is “usually reserved for violent criminals.”

“Here you have a defendant who had everything: family, love and support,” Deegan said. “And he’s asking for a lesser sentence because of it.”

Defense attorney Guy Cook, who had requested a six-year sentence, said the request for 25 years would essentially be a life sentence for the 50-year-old Rubashkin. Cook asked that he serve it at a facility in Otisville, N.Y., which better caters to the needs of Hasidic Jews.

“He only has about 25 or 26 years left on this earth,” Cook said. “Twenty-five years is a life sentence.”

U.S. District Court Judge Linda Reade says she’ll issue a ruling on May 27.

The possible life sentence enraged some in the Jewish community and surprised legal scholars. Six former U.S. attorneys general signed a letter sent to Reade that said that the possibility of life in prison was excessive for a nonviolent offender without a criminal record.

Deegan said there were many victims in the case: the banks who lost money to Rubashkin because of the fraud, the cattle sellers who had to take out loans to avoid closure, and the citizens of Postville, who watched their largest employer fall into bankruptcy and their town’s economy crumble.

Deegan said Rubashkin wasn’t some far-removed corporate officer who “sets (fraud) in motion,” but rather a hands-on executive who personally broke the law and directed others to do the same.

But Cook said he had gotten to know Rubashkin since he took on the case, and found him to be a deeply religious man who put the needs of others in front of his own.

“It was not a Ponzi scheme, it was not a Madoff scheme,” Cook said. “He made mistakes and he compounded those mistakes. And he felt trapped and didn’t know how to get out.”

Earlier on Thursday, Abe Roth, an accountant and longtime friend of Rubashkin, testified that prosecutors miscalculated the millions of dollars in losses suffered by Agriprocessors’ lender bank, First Bank Business Capital.

The amount of money lost by the bank is key because it could affect Rubashkin’s sentence. Roth countered prosecutors’ claims that the St. Louis-based bank lost $26 million because of Rubashkin’s fraud.

Roth said much of that loss had nothing to do with the fraud. He claimed the purported loss of $26 million doesn’t factor in the $4 million the bank made in interest from the loan, or how much of the loan came from fraudulently inflated invoices.

Prosecutors “made everyone believe that number of $26 million is God-given, and it isn’t,” Roth said.

Roth said only about $10 million was artificially inflated, and that the rest “was pristine, wasn’t influenced by any corrupted” accounts.

Rubashkin was convicted of creating phony invoices to show First Bank Business Capital that the slaughterhouse had more money flowing in than it did. After the Postville operation declared bankruptcy, the bank continued to pump cash into the plant to keep it running.

The cash infusions totaled about $5 million, but Roth said the bank is to blame because it failed to do due diligence on the company. Roth said the $5 million should not be factored into the bank’s loss and Rubashkin’s sentence.

“So your testimony is really that it’s the bank’s fault,” Deegan said while cross-examining Roth.

“It is their problem if they did not do proper due diligence,” Roth replied.

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