U.S. District Court Chief Judge Linda R. Reade has ordered that the Iowa meatpacking manager found guilty on 86 counts of fraud and money laundering will remain behind bars.

Sholom M. Rubashkin, who served as the day-to-day manager at Agriprocessors in Postville and is the son of company founder A. Aaron Rubashkin, will remain in the custody of U.S. Marshals until he is sentenced on the earlier conviction. It is unknown if Rubashkin, who recently had 72 immigration-related offenses against him dismissed, will remain in a county facility or will be moved to a federal prison. An exact sentencing date has not yet been established, and, since the process requires extensive reports for judicial review, the date could be several weeks from now.

In the bail hearing on Wednesday, the Rubashkin defense team pointed to the man’s strong community and family ties in Postville as well as his record of good behavior while on release pending trial. Prosecutors, on the other hand, told the court that the fact that Rubashkin was facing a sentence of possibly several hundred years in prison that the situation had changed significantly.

In addition, the prosecution called Mike Fischels, a special agent who has long been assigned to the Agriprocessors case, to testify about an overseas telephone conversation he had with a company supervisor still wanted by the government.

Fischels testified that he spoke with co-defendant Hosam Amara on the telephone about Amara’s flight from the U.S. to Israel. Amara indicated to Fischels that [Rubashkin] told him to leave the U.S. and return to Israel in order to remove himself from the situation facing Agriprocessors.

The government also presented a copy of a check and bank documents that suggest Rubashkin provided financial assistance to Amara around the time that he fled the U.S.

The court finds that the government’s evidence for detention is compelling.
Defendant’s actions prior to and during the pendency of the instant action, when coupled with the powerful incentive to flee due to the jury’s return of the Verdicts, demonstrates that Defendant poses a flight risk. The court notes that, in the Detention Order, it previously found that Defendant posed a flight risk.

The court acknowledges the overwhelming support that Defendant’s community has provided during the trial and the instant proceeding. The court also recognizes that Defendant took great pains to comply with the terms of his pretrial release. The court agrees that Defendant has shown he is committed to his family and to his community. Nevertheless, the court finds that this evidence does not rise to the “clear and convincing” level necessary to show that he is “not likely to flee [. . .] if released under [§] 3142(b) or(c).” 18 U.S.C. § 3143(a). Accordingly, the court shall grant the Motion.

Rubashkin’s defense team has pledged to appeal the fraud and money laundering convictions. It is unknown at this time, however, if they will also appeal this detention order.

Sholom Rubashkin, who was recently found guilty of 86 charges related to money laundering and fraud in connection with the raid, was set to go back on trial Dec. 2 in Sioux Falls, S.D. on the immigration offenses.

The order for dismissal by Reade follows a request by federal prosecutors filed early Thursday morning.

According to the government’s calculation of the sentencing guidelines, due in large part to the amount of loss associated with defendant’s fraud and false statement convictions, any convictions with regard to Counts 1 through 72 would be entirely eclipsed by defendant’s recommended guideline sentence on the counts for which he has already been convicted. This is not to minimize the importance of those counts, but at least for the purposes of the advisory sentencing guideline range, any convictions on Counts 1 through 72 would have no impact upon defendant’s sentence. However, any evidence of immigration violations would be relevant conduct that the Court could consider at sentencing even without a second trial.

In the government’s estimation, now that defendant has been convicted on the most serious offenses charged in the pending indictment (in terms of potential penalties), and given that a jury has determined defendant committed crimes by making false statements about the harboring of undocumented aliens at Agriprocessors, Inc., and his knowledge of undocumented workers at Agriprocessors, Inc., dismissal without prejudice of Counts 1 through 72 and the forfeiture allegation is the most appropriate and efficient manner in which to proceed in this case. Dismissal will avoid an extended and expensive trial, conserve limited judicial and prosecutorial resources, and lessen the inconvenience to witnesses. The public interest has been substantially served because of the convictions and jury findings noted above. The government asks that such dismissal be without prejudice so criminal charges and the forfeiture allegation could be reinitiated based upon a change in circumstances or a reevaluation of present
circumstances.

According to documents filed with the court, Rubashkin’s legal team had no objection to dismissal of the charges.

Prosecutors also noted in their motion to dismiss that the current financial condition of Agriprocessors, Inc. as a company “and the fact that it is an empty shell” were justifiable reasons for not pursuing possible forfeiture charges.

Rubashkin, 50, and other senior members of the Agriprocessors management and executive team still face a state trail, currently scheduled to begin next spring, on alleged violation of child labor laws.

Currently, Rubashkin is being held by federal authorities, pending a decision in a bail hearing held Wednesday.

Sholom M. Rubashkin

Rubashkin, who is the 50-year-old son of Agriprocessors founder and president A. Aaron Rubashkin, was convicted of all possible money laundering and mail, wire and bank fraud charges. He was also convicted on 15 out of 20 counts of failing to provide timely pay to livestock auctions and providers.

The verdict followed nearly a month of testimony and evidence in which the government sought to paint Rubashkin as one, if not the, mastermind in a plot to defraud creditors. The defense team, in contrast, chose to portray Rubashkin as inexperienced, naive and unprepared to serve as day-to-day manager for such a large undertaking as the kosher meatpacking plant in Postville.

Following the lengthy reading of the verdict, Rubashkin was taken into federal custody, and his defense attorney, Guy Cook, pledged to appeal. Rubashkin is expected to return to eastern Iowa next week for sentencing and a possible bail hearing pending appeal. He faces a maximum sentence of more than 1,000 years in prison for the guilty verdicts.

An early December trial has been slated for an additional 72 federal immigration-related charges against Rubashkin, and he also faces a trial in state court this spring for possible child labor law violations.

All of the charges stem back to a massive May 12, 2008 immigration raid at the Postville facility. More than 300 immigrant workers detained by federal authorities pleaded guilty to criminal charges related to identity theft within days of their apprehension, and the bulk have been deported after serving brief federal prison sentences. Some immigrant workers, however, continue to live in and around Postville and are expected to be called by the prosecution in the upcoming trial.

The road between the actual raid and the federal trial in Sioux Falls, S.D., was long and has often wound its way through traditionally uncomfortable conversations for Americans regarding immigration, civil rights, religious expression and the composition and worth of charity.

The Rubashkin family, all ultra-orthodox Jews affiliated with the Hasidic Chabad Lubavitch movement, have at times suggested that the charges against them stem not from any alleged illegal activity, but from anti-Semitism. Throughout the investigation, and especially following the initial arrest and jailing of Sholom Rubashkin, many of the Jewish religious faithful, either through their own conscience or through the prodding and help of Chabad, have defended the Rubashkins from wrongdoing and stood as character witnesses for the family’s contributions.

Both inside and outside of Jewish circles, however, the Rubashkins have drawn criticism, many believing that generosity was born of ill-gotten-gains, harvested on the back of an underpaid and often mistreated immigrant workforce. Media reports, which prompted the move of the trials from Iowa to South Dakota, have given supposed victims of child labor and sexual harassment at the Postville plant a voice.

The company known as Agriprocessors fell into bankruptcy last year, and has re-emerged as AgriStar under the new ownership of SHF Industries, a venture of Canadian businessman Hershey Friedman. Heshy Rubaskin, brother to Sholom and son of Aaron, continues to work at the reborn business.

At least six former members of plant management or the human resources department have pleaded guilty in the wake of the 2008 immigration raid:

April 13, 2009 — Elizabeth Billmeyer, 48 and the former human resources manager, pleaded guilty to one count of conspiracy to harbor undocumented aliens for profit and one count of knowingly accepting false resident alien cards.

March 19, 2009 — Penny Ann Hanson, 41 and a former human resources employee, pleaded guilty to conspiracy to make false statements on immigration documents.

Dec. 10, 2008 — Karina Pilar Freund, 29 and a former human resources employee, pleaded guilty to one misdemeanor count of aiding and abetting a pattern or practice of hiring undocumented aliens.

Oct. 29, 2008 — Laura Althouse, 38 and a former human resources employee, pleaded guilty to one count of conspiracy to harbor undocumented aliens and one count of aggravated identity theft.

Aug. 27, 2008 — Martin De La Rosa-Loera, 43 and a former plant supervisor, pleaded guilty to one count of aiding and abetting the harboring of undocumented aliens.

Aug. 20, 2008 — Juan Carlos Guerrero-Espinoza, 35 and a former plant supervisor, pleaded guilty to one count of conspiracy to hire illegal aliens and one count of aiding and abetting the hiring of illegal aliens.

Former plant operations manager Brent Beebe, 51, will soon be tried on immigration-related charges in federal court. Two additional plant managers — Hosam Amara and Zeev Levi — also face criminal charges, but have yet to be apprehended by authorities.

A Moving Video of the Daughter of Sholom Rubashkin from Zalman Tevel on Vimeo.

The video, along with a link to a donation page run by the National Committee for Furtherance of Jewish Education, reminds members of the Jewish community that “Pidyon Shvuyim is one of the greatest mitzvos possible.” Pidyon Shvuyim is the doctrine that commands Jews to redeem captives, which, according to the Jewish law called the Mishneh Torah, “takes precedence over supporting the poor or clothing them.”  This belief is further explained in the Yoreh Dei’ah, Chapter 252, which states: “Ransoming Captives takes precedence over feeding and clothing the poor, and no mitzvah is as great as ransoming captives. Therefore, any money which is collected, even for a religious purpose, may be diverted to ransom captives even if it is raised for the purpose of building a synagogue…”

While non-Jewish readers may not understand the significance of “ransoming captives,” it has been a very real and unfortunate part of Jewish history. The first likely incident was highlighted in the Bible when Lot, nephew of Abraham, was taken captive during the battle between Mesopotamian and Canaanite kings. Enemies and rogues learned that taking Jews captive could be very lucrative since the community was mandated and bound by law to pay the ransom. Historically, then, Pidyon Shvuyim has been used to gather or collect funds for the release of prisoners of war or others being held hostage against their will.

According to information published by Shmarya Rosenberg at Failed Messiah, the pledge drive for the legal fund appears to be a continuance of a prayer vigil and other activities for the benefit of the Rubashkin family. Rosenberg notes that there is no way to designate specific purposes of Pidyon Shvuyim funds donated via the site, and that all donated funds will be placed in the Rubashkin legal defense fund.

“It has been a very challenging year for us,” Weiss notes in the video as photos of her father in custody are shown. She also notes that the situation has been an opportunity for the family to renew their faith.

“Now, a few days before Yom Kippur, I ask you to please open your hearts and help my father who never turned anyone down,” she says. “The lawyers estimate that from now until the end of trial it cost about $500,000.”

Yom Kippur, the Jewish Day of Atonement, begins at sundown on Sunday, Sept. 27, and ends at nightfall on Monday, Sept. 28. It is considered the holiest of holy days of the Jewish year.

Sholom Rubashkin served as the day-to-day manager at the Agriprocessors plant in Postville at the time of a massive immigration raid that resulted in 389 plant workers, most Guatemalan or Mexican, being detained by federal authorities. He was taken into custody by federal authorities in the fall of 2008, and is currently facing a litany of charges ranging from bank fraud to immigration-related offenses. Chief Judge Linda R. Reade ruled last month that due to negative media, Rubashkin could not receive a fair trial in Iowa and moved the proceedings to Sioux Falls, S.D. The trial is set to begin on Oct. 10.

Rubashkin and his legal team have launched a law suit against the federal government, citing that officials with Immigration and Customs Enforcement did not provide a response to a Freedom of Information Act request. Rubashkin asked the government to provide any and all documentation in relation to the May 2008 raid in Postville, which led to the 163 charges he now faces.

Rubashkin and several other members of plant management, including his father, A. Aaron Rubashkin, who resides in Brooklyn, N.Y. and founded the company, also face several thousand state charges of alleged child-labor law violations.

The plant, which has emerged from bankruptcy proceedings, is now organized with a new name, Agri-Star, and is under new management. It continues to operate in Postville.

After an auction in bankruptcy court this afternoon, SHF Industries LLC., a new Iowa corporation tied to Canadian businessman Hershey Friedman, remains the only bidder for the bankrupt kosher meatpacker.

The Des Moines Register has more details:

SHF Industries has agreed to pay about $8.5 million to two banks that were Agriprocessors’ biggest creditors. Many smaller creditors, including numerous Postville-area businesses, would get nothing from the deal. The new owner would have to work out settlements with companies that have leased equipment to Agriprocessors.

The sale is expected to be wrapped up at a court hearing July 15. Joseph Sarachek, the court-appointed trustee, said the deal would have to be approved by a federal bankruptcy judge, but he said he saw no obstacles at this point.

The plant has been mostly shut down for the past year, but the Register cites state economic development officials who say that they expect SHF Industries to revive the business if the sale earns final approval.

Meanwhile, former Agriprocessors CEO Sholom Rubashkin awaits what are likely to be two separate trials, one for alleged immigration-related offenses and one for alleged violations of financial regulations.

The court’s ruling acknowledged that a jury would have a difficult time keeping all 142 federal charges against Rubashkin separate and that evidence presented to substantiate some charges could prejudice a jury’s decision on other, unrelated charges.

That means that prosecutors must try two cases, and that evidence from one trial may not be admissible in the other.

In an email to the Iowa Independent, Rubashkin’s attorney, Guy Cook, called the ruling a “very significant victory” for his client.

Leigh Rekow

The man appointed by the Postville City Council to serve as interim mayor accepted campaign contributions totaling more than $2,000 from members of the Rubashkin family, who founded and operated the beleaguered Agriprocessors meatpacking plant, site of a massive 2008 immigration raid.

Leigh Rekow, 74, took the oath of office Wednesday after being appointed mayor by a 3-2 vote of the council earlier in the week. He will serve as mayor through November.

Rekow, a Republican who served more than a decade on the Postville City Council, formerly represented Iowa House District 32 in the Legislature and served on the agriculture standing committee. It was during his campaigns for the Iowa House that Rekow accepted political contributions from Abraham Aaron Rubashkin, founder of Agriprocessors, and his son, Sholom Rubashkin, day-to-day executive in charge of the Postville plant.

The contributions, which were made during 2000 and 2002, total $2,100 — $1,600 from Sholom and $500 from Aaron Rubashkin.

Rekow, according to Stephen Bloom’s account in the book “Postville,” led the local effort to annex the meatpacking plant into the city. The plan was severely disliked by the Jewish community to the point of some accusing local residents of anti-Semitism and Sholom Rubashkin threatening to pack up the business and move it elsewhere if residents voted in favor of annexation.

“What upsets me is that some people in Postville think that we came in and took something that wasn’t ours,” Aaron Rubashkin is quoted in the book by Bloom as saying. “My sons are native-born Americans, just like the people of Postville. We have every right to make a life there — like the Postville people have. This annexation, what this Rekow is trying to make, we don’t need people putting sticks in the spokes of our wheels.”

The people did ultimately vote to annex the property, which allowed taxes and further regulation of the plant. Given that Bloom’s book was published in 2000, the same year as the Rubashkins began support of Rekow in his statehouse bid, logical assumptions can be made that either the rift was healed or the Rubashkin family preferred to have Rekow in Des Moines and out of local politics.

Either way, the person who now has the reins in Postville, is someone intimately familiar with the Rubashkin family and the history of Agriprocessors in Postville.

Speaking with Janell Bradley, a correspondent for the Waterloo Cedar Falls Courier, Rekow said his love for the city prompted his seeking the seat.

“I want to see Postville succeed,” Rekow said. “As a community we’re all pretty much working together. We have great hopes for Postville. We’re not giving up on anything.”

Rekow said he is willing to do what it takes to improve employment opportunities and fill empty houses and apartments. A community coalition is trying to address those issues.

“I plan to sit in and bring the necessary information to the council,” he added.

Former Postville mayor Bob Penrod resigned last month.

The Agriprocessors plant was the site of a massive federal immigration raid on May 12, 2008. Nearly 400 plant workers were detained, roughly a third of the plant’s workforce. Most were charged criminally and sentenced to federal prison terms prior to being deported. Sholom Rubashkin and several additional plant supervisors and members of management are also now the subject of federal investigations and criminal charges. The plant and its management also face state allegations of child labor law violations.

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.

Defense attorneys for Sholom Rubashkin, former day-to-day executive at Agriprocessors, had argued that pretrial publicity prevent their client from receiving a fair hearing in Iowa. The original call for a change of venue was joined by Brent Beebe, a former plant supervisor, and the company itself. In documents filed with the court, however, U.S. District Court Chief Judge Linda R. Reade disagreed.

“The issue before the court is not, however, whether Defendants Rubashkin and Agriprocessors have received ‘bad press’ from persons in high places. As counsel for Defendant Rubashkin pointed out at the Hearing, the issue is simply whether Defendants Rubashkin and Agriprocessors will be able to receive a fair trial in the Northern District of Iowa,” Reade wrote.

“At present, the impact of Governor [Chet] Culver’s guest column, as well as the other media articles and items Defendant Rubashkin presented to the court at the Hearing, is unclear.”

Reade stated that “the bad press was at its zenith” in the days and months immediately following the May 2008 immigration raid at Agriprocessors and has declined since that time. Because the trial is not scheduled to begin until September 2009, Reade felt any media influence would continue to deteriorate.

“Defendants Rubashkin and Agriprocessors also appear to place too much emphasis on the role of the print media in society,” she wrote.

“It would be irresponsible for the court to categorically impute the vitriolic comments of those who post comments in online newspapers and on other websites to the jury pool. The court has no way to know whether most of the comments on the Internet are written by potential jurors as opposed to minors, non-residents or other persons unable to serve on the jury.”

Despite denying the motion, Reade did leave the door open for defense attorneys to renew the request “following voir dire,” or jury selection. The court, she wrote, has reserved four days for voir dire instead of the usual half-day. In addition, parties affiliated with the case pool their resources and concerns to craft a potential juror questionnaire. The court is also open to pulling potential jurors from a larger geographic area and requesting a larger pool of potential jurors.

Earlier this month Reade also rejected the attorneys’ request to drop all charges based on antisemitism.

The May 2008 immigration raid at Agriprocessors resulted in the detention of 389 plant workers, or nearly a third of the plant’s workforce. Most were quickly charges with criminal offenses, tried and sentenced. The plant, which is in Chapter 11 bankruptcy, is currently operating under the preview of a bankruptcy trustee and with only limited poultry production. Bankruptcy sale is scheduled for May 23.

“The court finds Defendants have not met their heavy burden,” U.S. District Court Chief Judge Linda R. Reade wrote in her order. “The court empaneled this grand jury and charged it to set aside any private prejudices and only return indictments against those persons whom it found probable cause to believe had committed a federal crime. The court finds no credible, unbiased or competent evidence to show the grand jury violated its solemn oath.”

Attorneys for Sholom M. Rubashkin, former Agriprocessors executive, filed the motion to dismiss in late January. Their efforts were joined by attorneys for former plant supervisor Brent Beebe and the plant itself.

At a hearing on Feb. 23, the attorneys argued that the indictments could not stand because those who served on the grand jury were “infected by improper comment and consideration of religion, race and anti-Semitism.”

The Rubashkin family — founders and former operators of the Agriprocessors kosher meatpacking plant — subscribe to one of the largest Hasidic movements in Orthodox Judaism: Chabad-Lubavitch. The Agriprocessors plant in Postville was, prior to the raid, one of the nation’s largest distributors of kosher beef and poultry.

“Without divulging the specifics of the statements and questions at issue, it is the court’s firm conviction that there was no impropriety in these grand jury proceedings,” Reade said. “Simply put, Defendants have mischaracterized and taken out of context what are in truth innocuous statements and questions.”

Reade added that many of the statements challenged by the Rubashkin and Beebe legal teams were things said by witnesses, and not by members of the grand jury.

“The court is unwilling to impute the statements or beliefs of grand jury witnesses to all of the grand jury members,” Reade wrote.

The judge also found little use of the testimony offered by Patricia Kuehn, an Illinois-based consultant hired by the defense and allowed by the court to review portions of grand jury testimony.

“The government’s cross-examination of Ms. Keuhn was highly effective in that it exposed flaws in her reasoning, as well as her deep unfamiliarity with the federal grand jury process,” Reade noted.

Friday’s court order dealt only with the motion to dismiss. Defense attorneys have also requested the court hear each defendant’s case separately, and for a change of venue.

Jim Clarity, an attorney representing Agriprocessors’ interests, referred to the pretrial publicity as “sickening” and compared the plight of mounting a defense in the Northern District of Iowa to that of the Jews facing Nazi persecution in 1939 Poland.

“Move it to Minnesota or Chicago, but not Iowa because Iowa is poison,” Clarity said.

It is unknown when Reade will rule on the other motions. It is also unknown if any of the parties impacted by her refusal to dismiss will appeal.

The upcoming trail continues on the docket for September, although it could change.