Sholom Rubashkin, a Lubavich Orthodox Jew and father of 10 was the previous owner of the Agriprocessors slaughterhouse in Postville, Iowa, the largest kosher meatpacking plant in the United States.
In 2008, the government raided his plant and discovered hundreds of illegal immigrants. Sholom was then sued for breaking many immigration and labor laws, as well as for financial fraud, after defrauding banks out of more than $27 million.
A federal judge in Iowa sentenced Sholom to 27 years in jail, the largest sentence for such a white collar crime. In fact, the sentence was two years more than what the prosecution even asked for. A white collar crime is typically a non-violent crime that is committed for personal gain, usually money. Examples of white collar crimes include embezzlement, bribery, forgery and fraud.
In 2008, as part of the Bush administration's tough stance on immigration enforcement, federal agents raided the Postville plant. This raid resulted in the bankruptcy of the plant, prison and deportation for hundreds of the plant's illegal immigrant workers, and charges against the owner, Sholom.
After the closing of the plant, the entire town in Iowa has felt its affects, as much of the town's economy relied on this business.
Sholom was accused of mishandling a revolving loan from several banks and was charged with 86 counts of financial fraud. The immigration charges were dealt with in a separate trial, but the prosecution chose to dismiss them after his federal fraud conviction.
The judge agreed that Sholom misled the bank many times about the financial situation of Agriprocessors. During the trial, evidence was brought in showing that Sholom created fake invoices and secretly moved cash around from one account to another, resulting in a loss to the banks of $26 million. Besides the jail time, Sholom must also repay this amount back to the banks.
Was It Too Much?
Many people view Sholom's sentence as being too severe. The judge sentenced him for two years more than what prosecutors had requested, which is pretty unusual. Furthermore, such a sentence seems untypically high. Recent financial crime defendants, Jeffrey Skilling of Enron and L.Dennis Kozlowski of Tyco, both received more lenient sentences for even bigger fraudulent behavior. Skilling was sentenced to 24 years, after the court found he caused losses at Enron of $80 million. Kozlowski, who was convicted of a $150 million fraud, was sentenced in state court to 8 1/3 to 25 years.
The prosecutors initially asked for a life sentence, but then reduced their request to 25 years. Many experts rejected a life sentence for such a crime; six former attorneys general, including Janet Reno, wrote to the Judge and explained that a ordering a life sentence for such a white collar crime would be a severe misreading of the sentencing guidelines.
Furthermore the orthodox Jewish community also viewed the sentence as overly harsh and voiced their concerns.
What about the Workers?
Sholom was accused of hiring hundreds of illegal immigrants. After a federal raid, almost 400 immigrants working in the plant served a five-month prison sentence for identity theft and then deported.
However, some of the former workers is allowed to remain in the United States using a special visa, known as a "U" visa. This visa is given to victims of abuse. About 40 workers able to show that they have been hit by their managers at Agriprocessors received this visa.
Attorneys for Sholom recently filed their appeal with the U.S. 8th Circuit Court of Appeals in St. Louis. In the meanwhile, the plant is closed and Sholom is in prison. This case shows that courts are not getting any more lenient with white collar crime, in fact, they appear to be giving out even harsher sentences.
Questions for Your Attorney
- Could someone's actions support both an employment law and criminal law claim? If so, would an employee wait for the outcome in a criminal case before going forward with a civil lawsuit?
- There are relief programs for crime victims; do they address the needs of white collar crime victims, too?
- If one of my employees committed white collar crime, could that expose my business to any legal claims? Does it depend on what supervisors or corporate officers knew or should have known?