The modified indictment, which was filed today in federal court in Cedar Rapids, specifies that the Agriprocessors, Inc. corporate name, trademarks and corporate stock are subject to forfeiture. The trademarks would include such well-known brands as Iowa Best Beef, Shor Habor, Aaron’s Best and Rubashkin.

Sholom M. Rubashkin, son of company founder A. Aaron Rubashkin and a former chief executive at the Postville plant, remains in federal custody pending trial in this case and others. He is charged with various immigration and bank fraud-related charges.

Brent Beebe, Hosam Amara, and Zeev Levi, all former members of plant management, also face immigration-related charges. Amara and Levi fled the jurisdiction after a May 12 immigration raid at the plant and are currently been sought by Immigration and Customs Enforcement.

Human resources employee Karina Pilar Freund signed a plea agreement yesterday while admitting to one misdemeanor count of aiding and abetting a pattern or practice of hiring undocumented aliens. The charges she previously faced as a part of the November indictment have been dropped.

Federal authorities allege in the complaint that the company name, trademark and stocks were proceeds of the believed offenses of harboring undocumented aliens for profit and conspiracy to harbor undocumented aliens for profit. In addition, the modified complaint also seeks the forfeiture of all property used to facilitate the alleged offenses.

Agriprocessors has filed for Chapter 11 bankruptcy. It is unclear how this move by the U.S. Attorney’s Office for the Northern District of Iowa will affect the bankruptcy or the claims of numerous creditors. In addition, the plant in Postville, which briefly ceased production following Sholom Rubashkin’s arrest and detention, has resumed limited poultry production as bankruptcy trustee Joseph Sarachek negotiates with potential buyers. It is not publicly known if Sarachek’s negotiations have involved the facilities, corporate name and trademarks the government is seeking.

Hosam Amara, left, and Zeev Levi are former members of the management team at Agriprocessors. Both men are believed to have fled the jurisdiction following the massive May 12 immigration raid at the plant and are wanted by federal authorities. They are two of the five members of management indicted by grand jury.

The U.S. Attorney’s Office for the Northern District of Iowa unsealed new charges against Agriprocessors and five members of the meatpacking company’s management team today. The charges, ranging from immigration-related offenses to bank fraud, are included in a 12-count indictment.

Members of management named in the indictment are former Agriprocessors Chief Executive Sholom M. Rubashkin, 49; plant Operations Manager Brent Beebe, 51; former plant Poultry Manager Hosam Amara, 44; former plant Poultry Manager Zeev Levi; and former plant human resources employee Karina Freund, 29.

Charges from the indictment are as follows:

• Agriprocessors, Inc. — conspiracy to harbor undocumented aliens for profit, harboring undocumented aliens for profit, conspiracy to commit document fraud, aiding and abetting document fraud, six counts of aiding and abetting aggravated identity theft, and two counts of bank fraud
• Rubashkin — conspiracy to harbor undocumented aliens for profit, harboring undocumented aliens for profit, conspiracy to commit document fraud, aiding and abetting document fraud, six counts of aiding and abetting aggravated identity theft, and two counts of bank fraud
• Beebe — conspiracy to harbor undocumented aliens for profit, harboring undocumented aliens for profit, conspiracy to commit document fraud, aiding and abetting document fraud, and six counts of aiding and abetting aggravated identity theft
• Amara — conspiracy to harbor undocumented aliens for profit, harboring undocumented aliens for profit, conspiracy to commit document fraud, and aiding and abetting document fraud
• Levi — conspiracy to harbor undocumented aliens for profit, harboring undocumented aliens for profit, conspiracy to commit document fraud, and aiding and abetting document fraud
• Freund — conspiracy to harbor undocumented aliens for profit and harboring undocumented aliens for profit (The harboring charge is restated from a prior indictment, but the conspiracy to harbor charge is new.)

Beebe was arrested without incident at approximately noon at the Agriprocessors plant in Postville by Immigration and Customs Enforcement agents and the U.S. Marshals Service. He is slated to appear this afternoon in federal court in Cedar Rapids for an initial appearance and arraignment.

Rubashkin, who learned yesterday that he would remain in federal custody until trial on a different charge, is already being held in the Dubuque County Jail. Freund was released on conditions including electronic monitoring.

Federal authorities continue to search for Amara and Levi, both believed to have fled the jurisdiction shortly after the massive May 12 immigration raid at the kosher meatpacking plant. Iowa Independent was the first news outlet to report that Amara was believed to have fled. Those with information regarding Amara’s or Levi’s whereabouts are encouraged to contact ICE at (866) 347-2423.

Arraignments for Agriprocessors, Rubashkin and Freund have been scheduled for Nov. 26. In addition, Rubashkin and Freund already had a trial on other charges related to Agriprocessors slated for Jan. 20, 2009.

The Indictment

The week prior to the immigration raid, according to court documents, then Agriprocessors CEO Rubashkin loaned $4,500 to employees known to have fraudulent identification documents. Allegedly, Beebe then gave the money to the undocumented employees so that they could purchase new fraudulent alien resident cards. An Agriprocessors foreman, yet unnamed in court documents, arranged the purchase of the documents and Rubashkin allegedly asked human resources employees at the plant to work on Sunday, May 11, to complete all the new paperwork for several employees. The indictment states that Beebe was present that afternoon and assisted with the paperwork.

The indictment handed down yesterday by the grand jury relies heavily on the testimony provided by former Agriprocessors employees Martin De La Rosa, Juan Carlos Guerrero-Espinoza and Laura Althouse – all of which have been in federal court on their own immigration-related charges – to make the conspiracy, harboring and document fraud charges.

Previous court documents have indicated that 96 fraudulent alien resident cards and application paperwork were seized from the Agriprocessors human resources office on the day of the raid. Approximately 90 of the cards had numbers that were assigned to other people.

The bank fraud charges listed in the indictment stem from an incident on Feb. 29 in which Rubashkin, on behalf of the company, made a false certification to a lending bank that Agriprocessors was operating in a law-abiding manner, despite his having prior knowledge that numerous undocumented workers were employed at the plant. In addition, the indictment discusses Rubashkin’s alleged actions in September 2008 to divert customer payments away from a lender’s account, in order to enhance the Agriprocessors bottom line and pull additional funds from an existing line of credit tied to the customer payments.

“Beginning on a date unknown to the grand jury and continuing through about October 2008, in the Northern District of Iowa and elsewhere, defendants Agriprocessors and Sholom Rubashkin knowingly executed, and attempted to execute, a scheme to obtain funds under the control of First Bank and FBBC by means of fraudulent pretenses, representations and promises.

“… Rubashkin, on behalf of defendant Agriprocessors, and contrary to the terms of the loan agreement, diverted customer payments on accounts receivable. Defendant Rubashkin then hid from FBBC the fact that the customer payments had been received by, among other things, causing defendant Agriprocessors’ books to inaccurately reflect that no such payments had been received. By doing this, defendant Rubashkin cased defendant Agriprocessors’ books to inaccurately reflect that customers owed inflated amounts of money on their accounts. … Eventually, and in order to hide this portion of the scheme, defendant Rubashkin caused checks of Agriprocessors and third party entites he controlled to be drafted payable to defendant Agriprocessors and then presented to FBBC in such a way that they fraudulently appeared to be from a customer.”

The Penalties

The company faces numerous fines in conjunction with the charges. On five charges — the conspiracy to harbor, the harboring, the conspiracy to commit document fraud, the aiding and abetting document fraud, and aiding and abetting document fraud -– the company faces a fine of the greater of $500,000 or twice the pecuniary gain from the offense. Since the company was charged with six counts of aiding and abetting aggravated identity theft, the company faces the fine on each count. In addition, the company faces a fine of the greater of $1 million or twice the loss caused in relation to the bank fraud charges.

The individuals also face hefty fines for their alleged wrongdoings. The individuals, unlike the company, however, also face prison time.

The possible maximum penalty on charges of conspiracy to harbor is 10 years in prison, a $250,000 fine and three years of supervised release. Charges of harboring and aiding and abetting document fraud carry the same possible maximum sentence. Conspiracy to commit document fraud carries a possible maximum five years in prison, a $250,000 fine and three years of supervised release. Aiding and abetting aggravated identity theft carries a mandatory consecutive two years imprisonment, a $250,000 fine and one year of supervised release.

Sholom M. Rubashkin

Sholom Rubashkin, former chief executive at the Agriprocessors kosher meatpacking plant in Postville, was arrested again this morning by federal authorities on a charge of multi-million dollar bank fraud.

The new complaint against Rubashkin alleges that he executed a scheme to defraud a bank on a $35 million line of credit. According to documents filed with the court, Rubashkin diverted millions of dollars in customers’ payments to Agriprocessors’ accounts receivable — payments that were part of the bank’s collateral on the line of the credit, and that were supposed to be sent directly to a depository account for the lending bank.

Federal prosecutors contend that under the direction of Rubashkin, the diverted payments were not posted to customers’ accounts in the meatpacking plant’s accounting system until a later date. As a result, the complaint alleges, the value of the accounts receivable appeared inflated on company books. This inflated number was used as a criterion that allowed the company to borrow additional funds from the bank.

Rubashkin is also alleged to have instructed an Agriprocessors employee to delete evidence of the scheme from company computers. The instructions, according to the complaint, came the day after Rubashkin was released on bail on charges of harboring undocumented immigrants for profit, document fraud and identity theft.

Rubashkin was once again arrested at his home in Postville without incident. He is scheduled to appear in federal court in Cedar Rapids at 11 a.m.

If convicted on the bank fraud charges, he faces a maximum sentence of 30 years in jail, a fine of the greater of $1 million or twice the caused loss, and five years of supervised release. Rubashkin already faces a possible 20 years in prison on earlier charges.

Rubashkin was previously arrested on Oct. 30 on a federal complaint that charged him with conspiring to harbor undocumented aliens for profit, aiding and abetting document fraud and aiding and abetting aggravated identity theft. He was subsequently released on conditions that he wear a tracking device, that he limit his travel to eastern Iowa and that he and his wife, Leah, surrender their passports. Rubashkin also had to provide a $1 million appearance bond with $500,000 secured.

A federal grand jury indicted Rubashkin yesterday on those charges. Also named in the indictment was Karina Freund, a former Agriprocessors human resources employee, who was charged by the grand jury with one count of harboring undocumented aliens for profit.

Update

At his intial appearance in court, Rubashkin retained F. Montgomery Brown as his attorney. At the request of Brown, attorney Webb Wassmer appeared on his behalf.

A preliminary and detention hearing have been set for Nov. 19 at 2 p.m. Rubashkin will be detained at least until that time.

“Once again, Agriprocessors has demonstrated a complete disregard for Iowa law,” Dave Neil, Iowa labor commissioner, said in a prepared statement this morning. “This continued course of violations is a black mark on Iowa’s business community.”

Agriprocessors management will have 30 days to file written notice that they contest the $9.98 million penalty assessment by the state. Included in the assessment are:

• $9,643,000 penalty for illegally deducting a charge for frocks ($100 per instance, 96,436 separate instances) — affecting 2,001 employees for a total of $192,597.36 in lost wages.
• $339,700 assessment for illegally deducting “sales tax/miscellaneous” costs 3,397 times — affecting 1,073 employees for a total of $72,189.09 in lost wages.
• $264,786.45 in back wages

Additionally, the state is charging that Agriprocessors failed to pay 42 employees their last paychecks on May 16 and May 23, following the massive immigration raid at the plant on May 12.  Information released by the state indicates that “due to the overlapping nature of pay periods, seven individuals were shorted two paychecks.” The kosher meatpacker was assessed a $4,900 penalty for this violation.

Laura Althouse, 38 and a former human resources department worker at Agriprocessors, pleaded guilty in federal court this morning to one count of conspiracy to harbor undocumented aliens and one count of aggravated identity theft.

Court documents indicate that Althouse conspired with others to harbor undocumented workers at Agriprocessors in Postville, and that she did so for commercial advantage and private financial gain. Information from the court also showed that Althouse “possessed and used, without lawful authority,” a resident alien numer that was assigned to another person in committing the harboring offense.

Althouse currently remains free on bond, but her sentencing is pending. She faces a mandatory minimum of two years in prison and a possible maximum of 12 years in prison, a $500,000 fine and 4 years of supervised release.

Another Agriprocessors human resources worker, Karina Freund, has pleaded not guilty to immigration-related charges and remains released on bond. Both women have been named, along with other members of plant management, in a criminal complaint alleging more than 9,000 violations of Iowa child labor laws.

Two former middle management supervisors at the plant have also pleaded guilty to other immigration-related charges.

The various state and national investigations into practices as Agriprocessors appear to be taking a toll on the plant. Sources in Postville told Iowa Independent that the beef line at the plant has been shut down for three days, and that the roughly 250 cattle being kept in a holding pen were loaded on to trucks this morning. A call directly to the Postville facility to confirm the report resulted in no comment. Out-of-state spokespersons have not immediately responded to Iowa Independent’s request.

Karina Freund, 29, of Fayette, and Laura Althouse, 38, of Postville, are now scheduled for arraignment Sept. 24.

Althouse, now formally charged with aiding and abetting document fraud and aiding and abetting aggravated identity theft, worked in the human resources department and had duties related to payroll at Agriprocessors, according to court documents. The original complaint stated that on May 11, the day before Immigration and Customs Enforcment raided the plant, Althouse was in the plant and helping employess complete new job-related documents and applications with newly acquired false identities.

If convicted on all charges, Althouse faces a mandatory minimum sentence of two years and a possible maximum sentence of 12 years in prison, a $500,000 fine, a special assessment of $200 and four years of supervised release.

Freund is now formally charged with harboring and aiding and abetting the harboring of undocumented aliens. The original complaint filed with the court alleged that she worked in the human resource department and that several undocumented alien employees at Agriprocessors have implicated her in helpng them obtain falsified documents.

If convicted, Freund faces a possible maximum sentence of five years in prison, a $250,000 fine, a special assessment of $100 and three years of supervised release.

Three other members of management at Agriprocessors have had complaints filed against them in federal court. Two of those cases resulted in plea bargains. The third complaint remains sealed while officials search for former plant supervisor Hosam Amara.

The company, Althouse, Freud and three other company officials — Aaron Rubashkin, Sholom Rubashkin and Elizabeth Billmeyer — face state charges on possible violation of child labor laws.