Photo Credit: Rabbi Hanoch Teller

No sooner had Rubashkin been released than the Feds charged him with bank fraud. Why would the prosecutors introduce bank fraud, if the crime they were investigating was illegal immigration? Speculation is indicated.

Bank fraud charges would really ratchet up the puny illegal immigration allegations; and their punishments are incomparable. The federal prosecutors were about to throw at Shalom Rubashkin a book that had yet-to-be scripted. There was a clear (and succesful) attempt to artificially raise the possible punishment so that Rubashkin would suffer prison even before he was tried.

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And yet, even publicity-hungry prosecutors could not totally fabricate a charge as felonious as bank fraud. But they were digging, and uncovered that when Agriprocessors applied to First Bank Business Capital Inc., a subsidiary of St. Louis-based First Bank, for a $35 million line of credit, Shalom Rubashkin certified that the company was in compliance with all laws.

However, since Agri was employing illegal aliens, according to federal prosecutors, this refutes the company’s claim to be in conformance with all laws. Rubashkin’s attorney, Guy Cook, defended that his client never read the triple-digit-page loan contract, and then to illustrate his point, dropped it to the floor to a resounding thud. Who reads their car insurance, cell phone contract, mortgage or two-inch thick loan contract?

The line of credit was secured by an assignment of Agriprocessors’ inventory and receivables, with a right to draw up to 50 per cent of the book value of inventories and 85 per cent of the quantum of outstanding receivables – both of these safe percentages based on the company’s history of sales and receivables collection. Every day Agri’s controller would report the current balances of the pledged assets to the bank, and when accounts receivable arrived they were deposited in an affiliated bank.

In the records and computers that the government impounded during the immigration raid they discovered that although Agri never exceeded its $35 million line of credit; they violated the provision of the loan prescribing how much cash they could draw. As the collateral for the loan was the accounts receivable, Agri was able to borrow more money from the bank than they were legally entitled to by fabricating outstanding invoices that were never sent to the customers.

This scheme enabled Agri to draw more cash on an existing line of credit. Accordingly, prosecutors charged that Rubashkin intentionally deceived the company’s lender through the fake invoices in order to show St. Louis-based First Bank a rosier portrayal of income than existed.

What did Shalom Rubashkin do with this money? He used it to run his business, pay employees and do what he liked to do with money: spend it on charity. He donated to the Postville Yeshivah and pumped money into the kosher grocery store to keep it afloat.

No one doubts that Rubashkin did was illegal, and no one also doubts that it was a victimless crime. No one was hurt and for all the money that he borrowed he paid interest. It is the kind of crime that but just a few brief decades ago would have been laughed out of court.

But in 2008 this was no longer considered a laughing matter. Shalom Rubashkin did not merely lie, he committed fraud, most importantly, “bank fraud,” which carries a heavy sentence.

But surely even this new, weighty charge could not prevent the accused from being released on bail. And yet the federal prosecutor convinced the magistrate that since Rubashkin is Jewish, he is a flight risk to Israel. Israel’s Law of Return entitles any Jew to become an immediate citizen and as such would unlikely be sent back to America to face trial.

As Nathan Lewin succinctly phrased it, “This is false and outrageous[i].” So outrageous that American Jewry – which by and large remained silent as all of the accusations were being heaped upon Rubashkin – finally raised a hue and cry over this clear sectarian discrimination. This would be a precedent that could impact upon all of American Jewry. But until this happened, Shalom Rubashkin sat unjustly in jail, denied bail for 76 days.

Further unprecedented was the fact that the Federal Prosecutors saw fit to keep filing new indictments – no less than seven superseding indictments – just to make it look like there were more criminal charges, when it was really the same charge[ii] fragmented into separate, minute counts. By stacking the charges the prosecutors transformed one count of bank fraud into more than 90 counts by the time the case went to trial, commensurately increasing the potential sentence.

The prosecution relished stating how Rubashkin was accused of “91 counts of bank, mail and wire fraud.” The sheer number conjures a man so crime-ridden that Jesse James pales by comparison.

But there’s more. They even included the first-ever prosecution of the antiquated Packers and Stockyards Act of 1921, penalizing paying a cattle dealer later than on the day of the purchase[iii]. This esoteric and arcane statute was invoked to have one more charge leveled against Rubashkin. This way the accused looked even more guilty to the media, the public and ultimately… the jury.

Chodesh Tov – Have a pleasant month!

(To be continued)

 

[i] Borough Park Rally on behalf of Rubashkin, June 22, 2010

[ii] ibid

[iii] This law was enacted in response to concerns that the “Big Five” large meat packers had engaged in anticompetitive practices that had a deleterious effect on producers and consumers and was never intended to be applied in a situation such as a late payment by Agriprocessors.

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