White Collar Crime
BY Shulamit Shvartsman for Lawyers.comsm
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.