Rubashkin arrested again

By Ben Harris · November 14, 2008

Sholom Rubashkin has been arrested for the second time in three weeks.

Rubashkin, the former manager of the Agriprocessors packing plant in Postville, Iowa, and the son of the company owner Aaron Rubashkin, was arrested Friday at his Postville home on a federal bank-fraud charge.

According to the criminal complaint filed Friday in U.S. district court in Iowa, Rubashkin diverted millions of dollars in customer payments that were supposed to be used as collateral on a $35 million dollar bank loan. Rubashkin allegedly directed that the amounts not be posted to the company’s accounting system until a later date, which inflated the value of its accounts receivable and allowed Agriprocessors to borrow more money from the bank than it had collateral to cover.

The goverment further alleges that Rubashkin instructed an employee to delete evidence of the scheme from company computers on the day after he posted bond for his first arrest in late October.

If convicted, Rubashkin could face up to 30 years in jail. At a hearing Friday in Cedar Rapids, Rubashkin was ordered detained until Wednesday when a preliminary hearing on the complaint will be held, according to Bob Teig, a spokesperson for the U.S. Attorney’s Office for Northern Iowa.

According to the complaint, some funds were diverted through two Jewish institutions: the Kosher Community Grocery and the Torah Education Program of NE Iowa, both located in Postville. The funds eventually flowed back to Agriprocessors, but the temporary inflation of the amounts owed to Agriprocessors allowed it to draw more money from its line of credit, the document claims.

Rubashkin had been free on bail following his arrest last last month on charges related to his alleged role in helping procure false documentation for illegal immigrants employed at the plant. If convicted on those charges, he could face more than 20 years in jail.

Rubashkin’s legal troubles come as court proceedings get underway for Agriprocessors’ Chapter 11 bankruptcy filing, a move that has imperiled the American supply of kosher meat.

Prior to May 12, when federal agents arrested more than one-third of the company’s workforce in illegal immigration charges, Agriprocessors was the largest producer of kosher meat in the country.