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Former Iowa Slaughterhouse CEO Arrested
DES MOINES, Iowa (AP) — A former manager of a northeast Iowa kosher slaughterhouse was arrested Friday morning on a bank fraud charge and was headed to U.S. District court for the second time in less than a month.
U.S. Attorney’s Office spokesman Bob Teig said Sholom Rubashkin, former chief executive officer of Agriprocessors, was arrested at 8 a.m. at his home in Postville. He was being taken to Cedar Rapids for an 11 a.m. hearing.
Agriprocessors was the site of a May 12 immigration raid in which 389 people were arrested. In the months following the raid, the company has faced state and federal allegations that it violated child labor laws and broke safety rules.
The company also operated a plant near Gordon, Neb. It has been closed because of the company problems.
Teig said the charges announced Friday were related to depositing checks from customers and the alleged diversion of money.
Court records said that under a loan agreement with St. Louis-based First Bank, Rubashkin was supposed to deposit customer payments into an account at Decorah Bank & Trust as collateral on a loan. Records show that instead, Rubashkin allegedly diverted millions of dollars in customer payments into a different Agriprocessors account at a different bank. The payments would then not be posted on the customers’ Agriprocessors accounts until a later date.
That resulted in the inflation of the value of accounts receivable in Agriprocessors’ books, allowing the company to borrow additional funds from the bank without proper collateral.
U.S. Attorney’s Office spokesman Bob Teig said Sholom Rubashkin, former chief executive officer of Agriprocessors, was arrested at 8 a.m. at his home in Postville. He was being taken to Cedar Rapids for an 11 a.m. hearing.
Agriprocessors was the site of a May 12 immigration raid in which 389 people were arrested. In the months following the raid, the company has faced state and federal allegations that it violated child labor laws and broke safety rules.
The company also operated a plant near Gordon, Neb. It has been closed because of the company problems.
Teig said the charges announced Friday were related to depositing checks from customers and the alleged diversion of money.
Court records said that under a loan agreement with St. Louis-based First Bank, Rubashkin was supposed to deposit customer payments into an account at Decorah Bank & Trust as collateral on a loan. Records show that instead, Rubashkin allegedly diverted millions of dollars in customer payments into a different Agriprocessors account at a different bank. The payments would then not be posted on the customers’ Agriprocessors accounts until a later date.
That resulted in the inflation of the value of accounts receivable in Agriprocessors’ books, allowing the company to borrow additional funds from the bank without proper collateral.
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