Former Iowa Slaughterhouse Exec Gets 27 Years for Fraud

June 24, 2010

A former executive at a kosher slaughterhouse in Iowa that was part of a huge immigration raid was sentenced June 22 to 27 years in prison for financial fraud.

Legal experts called the sentence severe but not necessarily surprising as judges take tough stances on white-collar crime.

Sholom Rubashkin, a former vice president of Agriprocessors Inc., also was ordered to pay $27 million in restitution by Chief U.S. District Court Judge Linda R. Reade, who had released a memorandum outlining the sentence a day earlier.

A jury convicted Rubashkin last fall of 86 federal financial fraud charges. Prosecutors sought a 25-year sentence. Rubashkin’s attorney, Guy Cook, has said he plans to appeal.

Rubashkin oversaw the plant in Iowa that gained attention in 2008 after a large-scale immigration raid in which authorities detained 389 illegal immigrants, mostly Central Americans. The plant eventually filed for bankruptcy and was later sold.

After an investigation by a court-appointed trustee, prosecutors alleged Rubashkin intentionally deceived the company’s lender and directed employees to create fake invoices in order to show St. Louis-based First Bank the plant had more money flowing in than it did. Cook tried to portray Rubashkin as a bumbling businessman who never even read the loan agreement with First Bank.

Rubashkin also faced 72 charges for allegedly allowing illegal immigrants to work at the plant but Reade dismissed those charges and a jury acquitted Rubashkin of state child labor charges earlier this month.

Stanford University law professor Robert Weisberg called Rubashkin’s 27-year sentence “dubious” even though severe sentences are increasingly common in the wake of major fraud cases, such as that against Enron. The energy company’s 2001 collapse cost thousands of jobs and billions of dollars.

Weisberg contended Rubashkin’s case does not rise to such a level.

“I don’t understand why it was a longer sentence than what the prosecution asked for, especially when the prosecution asked for a sentence that was already pretty severe,” Weisberg said.

But Robert Rigg, a law professor at Drake University in Des Moines, said the slaughterhouse case is by no means small, “especially for Iowa.”

He said the raid’s economic impact and disruption the case caused in Postville and the state likely factored into Reade’s sentencing.

“There is a lot of collateral damage here and you can understand why a judge would take the facts and the circumstances of the case as an aggravating factor,” Rigg said.

Defense attorneys argue Reade improperly considered other factors, such as the raid and immigration case, in sentencing for the fraud conviction. They also say the 27 years could amount to their 51-year-old client spending the rest of his life in prison.

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