Sholom M. Rubashkin, son of Agriprocessors founder A. Aaron Rubashkin, was found guilty in November 2009 on 86 charges of financial fraud and money laundering. His counsel had requested that he be released on bail pending formal sentencing on those charges; however, a panel of three judges from the St. Louis-based Appellate Court denied the motion late last week. An exact sentencing date for Rubashkin has not yet been set, but is anticipated to take place this spring.

Counsel for Rubashkin can continue to appeal the decision.

On Monday, former plant operations manager Brent Beebe admitted in a plea arrangement with federal prosecutors that he brokered deals between Rubashkin and undocumented workers, effectively providing the workers with falsified documents for a cost. The transaction of more than $4,000, according to court records, took place one week before a massive May 2008 immigration raid at the Postville facility.

Beebe remains free on bond, pending sentencing.

Since the raid several members of management at the plant have been probed by federal authorities, and many have been convicted of wrongdoing. The plant itself was sold through bankruptcy and now operates under new leadership as AgriStar. Some former members of plant management, including Rubashkin’s brother, Heshy Rubashkin, continue to provide services to the new plant owners, although the exact extent of their involvement remains unclear.

Due to the trial process, several undocumented workers were detained in Postville as possible key witnesses. Wearing ankle GPS tracking devices, some hoped only for deportation while others began their own legal battles to establish residency in the U.S. Just days following Christmas, most of those detainees were brought to Cedar Rapids where their ankle tracking devices were removed by court officials.

The Rubashkin family and friends, who have rallied around Sholom throughout the process, have hired a New York-based communications firm to represent the interests of an established defense fund. The company has reached out to members of the press and has began a presence on social networking sites.

Juan Carlos Guerrero-Espinoza, 36, was sentenced to and is serving 36 months in federal prison. Two years of that sentence was a mandatory ruling for aggravated identity theft, according to court documents, and was a term of the plea deal he signed that allowed him to avoid deportation and for his wife and children to return to the U.S.  following his prison term. He entered into the plea agreement in late August 2008.

Roughly nine months later, on May 4, the U.S. Supreme Court ruled that many of the convictions and sentences given to immigrant detainees from the Postville raid were in error. According to the ruling, federal prosecutors inappropriately used aggravated identity theft laws to prosecute undocumented workers because the prosecution did not prove that the workers knowingly used identities that belonged to other individuals.

“As a matter of ordinary English grammar, it seems natural to read the statute’s word ‘knowingly’ as applying to all subsequently listed elements of the crime,” wrote Justice Stephen G. Breyer in the decision.

Other Agriprocessors supervisors, despite being originally charged with aggravated identity theft, had charges removed by the prosecution following the U.S. Supreme Court ruling. In light of this, attorneys for Guerrero-Espinoza is requesting the court vacate or correct his sentence to reflect what has happened in the other cases and the decision by the Justices. If the request is granted, he could be freed after serving 19 months.

Court documents filed in August 2008 indicated that Guerrero-Espinoza “conspired with others, and aided and abetted his employer, in hiring more than 10 individuals” whom he knew to be undocumented and unable to legally work in the U.S. He was convicted, in part, due to a conversation he had with employees under his supervision on May 7, 2008. At that time Guerrero-Espinoza allegedly told workers he knew to be illegal immigrants that they were going to be terminated and then immediately rehired by Agriprocessors. While this testimony goes directly to the aiding and abetting illegal aliens charge, it does not speak directly to whether Guerrero-Espinoza was aware that the documents used to re-hire the workers stemmed from stolen identities.

Upon the federal conviction of Sholom Rubashkin, former Agriprocessors day-to-day manager, on numerous fraud-related charges, prosecutors have agreed not to seek a second trial on the immigration-related offenses that he faced. Without that trial, it is unlikely that much of the immigration-related evidence gathered at the Agriprocessors site following the 2008 raid, or much of the key witness testimony, will ever be publicly revealed.

The U.S. Senate Judiciary Committee, of which Iowa Republican Chuck Grassley is a member with seniority, agreed today by unanimous consent to pass the nominations of Stephanie Rose and Nick Klinefeldt on to the full Senate.

“These individuals are enthusiastic, intelligent attorneys, and I’m pleased to support their nominations,” Grassley wrote in his statement for the committee. “I urge my colleagues to join me in voting for [them].”

Nick Klinefeldt & Stephanie Rose

Although both nominees are considered well-qualified for the positions, neither has been able to escape criticism.

Rose’s critics point to her role in the prosecution of the more than 300 immigrants that were detained in the raid at Agriprocessors in Postville. Criticism of Klinefeldt, which has been little more than a whisper when compared to the organized and often aggressive effort against Rose, has not centered on him personally, but on the fact that his father is currently serving a 10-year sentence on drug-related charges. In each instance, Harkin has vehemently defended the two attorneys.

In addition to the two Iowa nominees, the committee also approved by unanimous consent the nomination of Kenyen Brown for U.S. Attorney for the Southern District of Alabama.

If confirmed by the Senate, Klinefeldt will replace Matt Whitaker, who was nominated by then-President George W. Bush and unanimously confirmed by the U.S. Senate in June 2004. If confirmed, Rose will replace Matt Dummermuth, an attorney recommended by Grassley and appointed by then-President George W. Bush in January 2007. Although nominated by the Bush administration in December 2008, Dummermuth never faced Senate confirmation.

There are a total of 93 U.S. Attorney posts in the nation. To date, including the three nominees today, the Judiciary Committee has approved 24 individuals, and 18 of those have gone to be confirmed by the Senate.

In the interim, Reade will decide if the jury pool is too tainted to hold proceedings in Cedar Rapids and if the trial should be moved to a neighboring state.  Although Cedar Rapids is roughly 100 miles from Postville by car, defense attorneys for former day-to-day executive Sholom Rubashkin have argued that any location in Iowa is unacceptable due to media reports regarding the raid and subsequent arrests, an editorial written by Gov. Chet Culver and an additional case that alleges child-labor law offenses that has been brought by the state.

Rubashkin and three additional former supervisors — Brent Beebe, Hosam Amara and Zeev Levi — have all entered not guilty pleas in connection with the myriad of federal immigration-related and fraud charges that have been brought against them by federal authorities. Amara and Levi, who are believed to have fled to Israel, have not yet been taken into custody.

In addition to the change of venue, Rubashkin has also petitioned the court to dismiss all 163 federal counts against him due to “abuses of the grand jury process.”

Reade said she anticipates making a ruling “within days.”

Agriprocessors, the meatpacking plant owned and operated by the Rubashkin family that was the site of an Immigration and Customs Enforcement action in May 2008 in which 389 workers were detained, has been removed from indictment by federal prosecutors. Following a bankruptcy sale, the plant is now under new ownership.

SHF Industries, a company formed in May by Canadian plastics manufacturer Hershey Friedman and his son-in-law Daniel Hirsch, is set to become the company’s new owners. Friedman has indicated that he will continue the plant as a meatpacking operation, and will continue to focus on kosher products.

An initial bankruptcy auction failed to produce a buyer in March when two key holders of company debt made bids on their own interests. SHF Industries was able to work out deals with both the key debt holders — First Bank Business Capital and MLIC Mortgage — in May and June. SHF, according to documents released today by the court, also advanced funds to the estate in an amount in excess of $1.8 million.

SHF’s total offer for sale and transfer of assets was $8.5 million. The offer does not include leased equipment, tax refund claims, frozen inventory or commercial tort claims that were present or relate to anything prior to the sale. All other assets are being sold to SHF “free and clear of all liens, claims, encumbrances and other interests of any kind or nature.” This statement includes any outstanding payroll owed to Agriprocessors employees, taxes, fees and creditor debt. Existing plant employees that are hired by SHF will be provided new employment contracts as if they were assuming new employment.

Judge Kilburg stated that “without an expeditious sale of the assets, there will be substantial diminution in the value of the assets.” Anticipated closing date of the sale is Aug. 3, and SHF is not required to provide more than $800,000 to the bankruptcy trustee for business expenses between now and that date.

The case, which had been scheduled to start next month, was delayed after Judge Nathan Callahan received requests from both prosecutors and defendants. A new date has not been set, but the groups are scheduled to come back before the judge on Jan. 6, 2010 for a status hearing.

In September 2008, the Iowa Attorney General’s Office charged several persons affiliated with the Agriprocessors plant — the site of a massive immigration raid in May 2008 — with more than 9,000 counts of child labor law violations. Named in the state charges were A. Aaron Rubashkin (company founder and owner), Sholom Rubashkin (day-to-day chief executive officer), Elizabeth Billmeyer (director of human resources), Laura Althouse (human resources worker) and Karina Freund (human resources employee).

Nearly all of those facing these state charges have also been charged and/or faced federal immigration-related charges.

Today Joseph Sarachek, the Chapter 11 bankruptcy trustee for the beleaguered Agriprocessors meatpacking plant, filed a supplemental motion requesting the court reconvene the auction to consider the sale of the plant to SHF Industries, Inc. The actual sale of the plant, although recommended by Sarachek, must be approved by both the bankruptcy court and federal prosecutors.

SHF Industries, incorporated in Iowa, is owned by Hershey Friedman, a Canadian businessman, and two additional partners. Prior to presenting an offer for the plant, SHF first approached two key debt-holders and was able to hammer out an agreement to purchase their interests, according to documents filed with the court. Earlier court proceedings listed the major debt interests at over $20 million, Sarachek told the Associated Press that the actual buyout was “significantly less.”

With the two key debt holders placated, however, it is much more likely that a bid for the plant will be successful.

Agriprocessors, the site of a massive immigration raid on May 12, 2008, never fully recovered when 389 workers were bussed out of town by more than 800 Immigration and Customs Enforcment agents. Federal prosecutors, once finished with the immigrant workers, began picking their way up the plant’s management team. The arrest of Sholom Rubashkin, a son of company founder A. Aaron Rubashkin, led to the Chapter 11 filing and the temporary closing of the plant.

SHF, according to court documents, is offering an “as is, where is” sum of $8.5 million in addition to what has already been invested in existing debt. SHF is also willing to allow the existing trustee continued access to records.

“The condition to closing is the entry of an order by the bankruptcy court authorizing the sale of the assests to SHF, free and clear of all claims, liens and other encumbrances. … SHF is not acquiring, nor assuming, any debts or obligations of the debtor or the estate.”

Finally, SHF, according to the motion filed by Sarachek, is willing to provide the court with an affadavit, “sworn under the penalty of perjury,” that establishes any connections or affiliations the company has either with existing creditors or other parties of intest in the case, including members of the Rubashkin family or any of the multiple corporations the family has created.

The sale needs the approval of federal prosecutors not only due to continued criminal investigations and charges against former plant operators, but because the sale, as described in court documents, would also include certain company trademarks — items the federal government have already marked for forfeiture.

More details regarding the offer should be forthcoming when Sarachek files an asset purchase agreement with the court prior to a continuance of the bankruptcy sale.

Elizabeth Billmeyer, 48, of Postville is facing one count of conspiracy to harbor undocumented aliens for profit and one count of knowingly accepting false resident alien cards. The charges were outlined in documents filed today with the U.S. District Court for the Northern District of Iowa.

The documents allege that, during at least five years preceding the immigration raid, Billmeyer conspired with others to harbor illegal aliens at Agriprocessors for the purpose of commercial advantage and private financial gain. During the same time period, she is also believed to have knowingly accepted false resident alien identification cards.

If convicted on the charges, Billmeyer faces a possible maximum of 20 years in prison, a $500,000 fine and a $200 special assessment. In addition she could face a maximum of six years of supervised release following any prison term. Billmeyer was also named in a state suit alleging more than 9,000 counts of child labor law violations.

In addition to the charges against Billmeyer, the U.S. attorney’s office also filed an amended 79-count superseding indictment against Agriprocessors, Inc., former Agriprocessors executive Sholom Rubashkin and several plant managers. The new document adds factual allegations to a previous indictment, deletes two previously charged counts and consolidates several previously charged counts.

The new indictment includes one count of conspiracy to harbor undocumented aliens for profit, one count of harboring undocumented aliens for profit, one count of conspiracy to commit document fraud, one count of aiding and abetting document fraud, seven counts of aggravated identity theft, 14 counts of bank fraud, 24 counts of making false statements to a bank, 10 counts of money laundering and 20 counts of willfully violating an order of the U.S. Department of Agriculture secretary.

Both Rubashkin and Brent Beebe, a plant supervisor, appeared previously before the court and were released on several conditions that included electronic monitoring. Arraignments on the new indictment have not yet be set.

Federal prosecutors indicate that the investigation, which began in October 2007, remains ongoing.

The Agriprocessors plant, once the largest employer in the Postville area, was the site of a federal raid that netted 389 workers on immigration-related charges. Most were tried and convicted of criminal wrongdoing and were sentenced to federal prison time prior to deportation. The plant never financially recovered from the raid and filed for Chapter 11 bankruptcy protection in November. A bankruptcy auction that began on March 23 did not resolve disputes between potential buyers and creditors.

The bankruptcy trustee, Joseph Sarachek, is expected to appear before a federal judge this week to present either an amicable sale or alternative funding plan.

Juan Carlos Guerrero-Espinoza, 36 of Postville, received a three-year federal prison term today for conspiring to hire and aiding and abetting illegal immigrants at the Agriprocessors meatpacking plant.

Court documents indicate that while Guerrero-Espinoza oversaw roughly 60 employees on the beef line at Agriprocessors, he encouraged several under his supervision to obtain new fraudulent identification documents in May 2008. He received $4,500 in cash from the Rubashkin family, owners of the plant, to loan to the employees who needed money to purchase the new fraudulent documents.

Penny Ann Hanson, 41 of Clermont, admitted that she conspired to make false statements on immigration documents while working in the human resources office at Agriprocessors. Although currently free on bond until sentencing, she faces a maximum sentence of 15 years in prison, a $500,000 fine, a $200 special assessment and six years of supervised release.

According to information filed earlier this month, Hanson conspired with others to make falsified statements on immigration I-9 forms and knowingly accepted fraudulent resident alien cards. These offenses, according to her testimony took place between September 2003 and December 2006.

In addition, on September 3, 2004 Hanson falsely certified on a form I-9 that she had examined an identification document presented by an applicant at the plant, and that the document appeared genuine. Court documents state that she did not examine the identification document in question.

Guerrero-Espinoza is being held in the custody of the U.S. Marshal’s Office until he can be transported to a federal prison.

The federal investigation into possible illegal activities at the Postville Agriprocessors plant began in October 2007. It has continued since May 2008, when federal immigration authorities stormed the meatpacking plant and detained nearly 400.

Several additional supervisors and human resource employees who worked at the plant await trail and/or sentencing on immigration related charges. The plant itself, which is in Chapter 11 bankruptcy, is also the subject of a criminal case. Day-to-day chief executive Sholom M. Rubashkin, son of company founder A. Aaron Rubashkin, also faces a myriad of criminal charges ranging from multi-million dollar bank fraud to immigration-related offenses.

At least two former plant supervisors are believed to have fled the country and are being sought by federal authorities. Earlier this month another plant supervisor, Martin De La Rosa-Loera, was sentenced to two years in federal prison on immigration-related charges.

Three additional property companies that owned and managed residential and other real estate interests in Postville and the surrounding area have also filed for Chapter 11 bankruptcy protection. Sholom Rubashkin and his brother Heshy were listed as the companies’ officers.

In addition to the federal charges, members of Rubashkin family and several other company employees face more than 9,000 violations of Iowa’s child labor laws.

Although other members of the Agriprocessors human resources department are believed to have come before the federal court this month, to date no additional employees face charges. The investigation, according to prosecutors, is ongoing.

At least four others, however, are operating without a registering agent on file with the state and have been notified of pending state action.

Iowa law requires corporations to continually maintain a registering agent — a person in the state who is available to receive service of process on behalf of the company and who files required reports with the state.

The Iowa secretary of state has the authority to begin dissolution proceedings for any company that has operated for 60 days without such an agent. The proceedings begin with a warning letter, explaining that administrative dissolution will occur if the situation is not rectified within another 60 days.

According to documents filed with the state, Jay Eaton, an attorney with the Iowa-based Nymaster, Good, West, Hansell & O’Brien law firm, had served as the registering agent for eight companies with Rubashkin ties since February 2007. The companies are:

• Agriprocessors, Inc.
• Cottonballs, LLC
• Gemach Mamash Now Corporation
• Nevel Properties Corporation
• Amereeka Properties, LLC
• Lagoon Technology LLC
• Kosher Community Grocery, Inc.
• Best Value Distributors, Inc.
• Best Value Food Products, LLC

Eaton, who resigned as registering agent for the companies on Nov. 5, 2008, declined comment when contacted by Iowa Independent Tuesday morning, saying he did not feel it was appropriate to discuss client matters with the media.

Two months earlier, however, Eaton and Patrick White, another attorney with Nyemaster Goode, requested and were granted permission from the federal court to withdraw as counsel for Agriprocessors. Their written request to the court cited non-payment.

According to a spokesman in the secretary of state’s office, letters indicating the office’s intent to dissolve the companies were sent in early January.

Yesterday, Feb. 23, the office was notified that Charles Kelly, an attorney in Postville, would serve as registering agent for five of the companies — Agriprocessors, Amereeka Properties, Gemach Mamash, Lagoon Technology and Kosher Community Grocery.

As of today, the office had not received notification about who, if anyone, was serving as registering agent for the family’s other four companies: Cottonballs, Nevel Properties, Best Value Distributors or Best Value Food Products.

The companies have roughly two weeks to name a new registering agent or the secretary of state has the authority to dissolve the companies. A business dissolved by the secretary of state, according to the Iowa Code, continues to exist, but the only business it is allowed to conduct is what is necessary for liquidation. Companies can be reinstated by the state if the problems that led to the dissolution are rectified.

Prior to Eaton serving as registering agent for Agriprocessors, the company was administratively dissolved twice for not filing required reports with the state, once in 1994 and again in 2004. Both times the business was reinstated. The company, now the subject of a Chapter 11 bankruptcy, lists its officers as Aaron, Hesky (sic) and Sholom Rubashkin on state documents.

Many of the companies tied to the Rubashkin family have similar corporate officers and/or use the same address as their principal place of business. For instance, Cottonballs, a poultry firm founded in late 2004, maintains the physical address of the Agriprocessors plant in Postville as its principal office. Cottonballs was also mentioned by a creditor in the Agriprocessors bankruptcy case.

Nevel Properties, in addition to filing with the plant’s physical address, lists its officers as Sholom Rubashkin (president and treasurer) and Tzvi (Heshy) Rubashkin (secretary). Allamakee County public records show Nevel Properties as the deed holder on 85 real estate interests in Postville.

Amereeka, which initially filed with the state on July 18, 2006, also lists the plant’s physical address as its principal place of business. The company is listed as the contract holder on eight Postville real estate interests and as the deed holder on two others, according to county records. All the properties were purchased from Ro-Ka Acres, Inc., a company founded in 1989 by Postville elementary school guidance counselor Ron Wahls, on July 1, 2006.

Gemach Mamash, founded in 1996, has Sholom and Tzvi (Heshy) listed as officers. Because of Jewish laws that prohibit charging interest on a loan to a fellow Jew, gemach are funds set up in Jewish communities to provide a source for interest-free loans. The fact that the Jewish religion encourages the lending of money but prohibits the charging of interest to fellow believers was a subject of interest in Sholom Rubashkin’s recent motion to have federal criminal charges against him dismissed.

Lagoon Technology was formed in April 2005 and uses the physical plant address as its home office. Given information in Postville City Council minutes and a state auditor’s special investigation report, Lagoon Technology was likely set up to provide reimbursements to the city in connection with agreed upon maintenance of the waste lagoons.

State filings for Kosher Community Grocery show the company was set up in May 2005, and list officers as Sholom Rubashkin (president and secretary) and Tzvi Rubashkin (president and treasurer). The two are also listed as officers for Best Value Distributors, formed in 2001. Best Value Food Products, also formed in 2001, also lists the same home office as Agriprocessors and the other companies.

At least three additional companies with ties to the Rubashkin family and registered in Iowa were not affected by registering agent resignation. Agri-Food Distributors, Inc., founded in 1994, Postville Rabbinical Academy, founded in 2000, and Best Value, Inc., founded in 2001, have not had their active status with the state interrupted. Sholom and Tzvi (Heshy) Rubashkin are listed as officers for all companies. Aaron Rubashkin is listed as president of Agri-Food Distributors, and, in the case of Best Value, Inc., a Joseph Rubashkin of Postville and a Guttel (sic) Goldman of Miami are also officers.

Goldman, a daughter of Agriprocessors founder A. Aaron Rubashkin, was listed along with Sholom, Heshy and Yossi Rubashkin as officers in the Florida-based company Shemesh, Inc., founded in 1999 as a distribution center for Agriprocessors kosher meat products. After failing to file mandated reports with the state in 2005, the company was administratively dissolved. When it was reinstated in 2007, only Sholom Rubashkin was listed as a company officer. Although a 2008 annual report filed with Florida in August 2008 also shows Sholom Rubashkin as the only officer of the company, an amended report, filed in December, removes Sholom from the company and names Goldman as the sole officer.