The government’s misleading testimony ensured that Sholom Mordechai would be falsely pinned with a massive $26 million loss amount, the brief contends.
Known as a 2255 Petition, the new motion cites multiple grounds for the draconian 27-year jail sentence to be set aside and for a hearing and Discovery to be conducted to fully develop these arguments before a judge.
An earlier appeal, denied by the 8th Circuit in 2012, focused on disclosures of judicial misconduct in the Rubashkin case. The findings surfaced after FOIA documents brought to light multiple ex parte communications between the trial judge, Judge Linda Reade, and the Iowa U.S. Attorney’s Office that culminated in Sholom Mordechai’s arrest and prosecution.
Being so immersed in the case compromised the judge’s ability to remain neutral, rendering the trial fundamentally unfair, the appeal had argued, and entitled Sholom Rubashkin to a new trial.
The new appeal addresses the issue of ex parte communications from another angle: prosecutorial misconduct. By concealing improper ex parte interactions from the defense, the government thwarted Sholom Rubashkin’s ability to act in his own defense by asking for the judge’s recusal.
Even had she denied the request, the issue would have been preserved for appeal, something not possible once it was legally dismissed as no longer “timely.” Thus, the concealment of exculpatory information was a violation of due process of law that should vacate the prison sentence.
SEEKING AGRIPROCESSORS FINANCIAL RUIN
“Mr. Rubashkin’s right to due process of law under the Fifth Amendment was violated when the government failed to disclose exculpatory information concerning actions it took to influence and intimidate the Agriprocessor’s bankruptcy trustee and prospective buyers….and when the government presented misleading testimony concerning this issue at Sentencing,” the brief states.
The prosecutors “forceful intervention quashed interest of prospective buyers, increasing the loss attributable to Mr. Rubashkin by potentially many millions of dollars,” the motion argued.
Prosecutors accomplished their goal by imposing a “No-Rubashkin Edict” on prospective buyers, prohibiting them from employing any Rubashkin family member as a consultant or member of upper management. They did this despite the fact that no one except for Sholom Mordechai had been charged or even implicated in any criminal activity.
Their improper actions caused the bank to lose the collateral it had invested in the plant, the motion said. Those losses, pegged in government papers at $26 million, were then attributed to a grand fraud scheme and used to drive up Sholom Rubashkin’s jail sentence to extraordinary heights.
A powerful rebuttal of the $26 million figure came from financial accountant Abe Roth who traveled from Brooklyn to the 2010 Iowa Sentencing Hearing, to share the results of weeks of analysis of Agriprocessors’s financial data. Roth testified that prosecutors miscalculated the amount of loss by almost $18 million.
Prosecutors “made everyone believe that number of $26 million is G-d-given, and it isn’t,” Roth said. “Where did they get this number from? It’s an arbitrary number supplied by the bank. No one has produced the calculations and evidence supporting it.”
The 2255 Motion underscores this argument.
Not only did prosecutors conceal evidence of their actions from the defendant, they presented government witnesses who lied on the stand about it, the new motion states.
The witnesses’ testimony “downplayed or explicitly denied” the prosecutors’ actions in intimidating the trustee and prospective buyers,” the brief said. “This misleading testimony influenced the Court’s findings concerning the magnitude of the loss attributable to Mr. Rubashkin’s convictions, violating Mr. Rubashkin’s right to due process of law under the Fifth Amendment.”
REVISITING THE 2010 SENTENCING HEARING: THE COVER UP
The 2255 Petition revisits the above-mentioned Sentencing Hearing at which, in response to defense claims that the government itself had orchestrated the ruin of Agriprocessors, prosecutors called attorney Paula Roby who represented the court-appointed trustee.
Roby denied the existence of any “edict” to prevent a new buyer from hiring anyone linked to Sholom Rubashkin.
“The government was only concerned that Sholom Rubashkin himself would not re-acquire ownership in the plant,” Roby stated. “Having Rubashkins in the business was not at all a “deal-breaker.”
Under cross-examination by defense counsel Montgomery Brown, government attorney Roby insisted there was no government-backed effort to exclude Rubashkin relatives from employment at Agriprocessors.
This writer was present at the Sentencing Hearing at which these statements were made under oath. One could sense amazement in the gallery where scores of observers sat listening. Many clearly recalled multiple press reports in the Iowa press quoting government statements that no one from the Rubashkin family would be permitted to serve in the new Agriprocessors management. [See Sidebar] And here this was being denied under oath!
Astonishment among spectators grew as Mr. Brown highlighted on a large screen in the courtroom a sworn affidavit from a Brooklyn businessman. Mr. Meyer Eichler affirmed that in his negotiations as an interested purchaser, he had been informed by government authorities that he would be subject to prosecution were he to employ any Rubashkin-related employee in management after buying the plant.
In an interview with Yated, Mr. Eichler affirmed that he had been scared off by the warnings from U.S. attorneys. “Despite being very interested in purchasing Agriprocessors, I didn’t feel confident we could operate the plant successfully without input from the Rubashkins,” Eichler said. “These people are the experts in the kosher slaughter industry. In addition, the “no-Rubashkins” policy would kill the whole appeal to investors.”
Shown the affidavit that collapsed her testimony deny a No-Rubashkin Edict, the government witness representing trustee Joe Sarachek squirmed in discomfort. Her testimony was followed by a defense witness who further shredded her credibility.
WITNESS EXPOSES GOVERNMENT’S ATTEMPT TO ALTER THE RECORD
Another defense witness, Steve Cohen of Twin City Poultry, testified that in his negotiations to purchase Agriprocessors in January 2009, he had been informed by trustee Joe Sarachek that he had to deal with federal authorities.
He and his lawyers conferenced with U.S. attorney Murphy and Sarachek, who confirmed that there was no prospect of allowing Steve Cohen to buy the plant unless he promised not to include anyone from the Rubashkin family in management. Only then, Cohen testified he was told, would the government drop its forfeiture claims against the company.
Had a buyer purchased the company when it was still a running $80 million operation, all of Agriprocessors loans would have been repaid. New ownership of the plant would have satisfied the banks and the creditors. It would have been especially hailed by Postville residents whose town and personal lives had been so shattered by the ICE raid.
“When the beleaguered Agriprocessors meatpacking plant first filed for Chapter 11 bankruptcy protection, a small glimmer of hope emerged in Postville,” wrote the Iowa Independent. “There was an opportunity for another company to take over operations at the plant, for production to continue and for the community not to lose its largest employer.”
But it was not to be. Apparently, the survival of Agriprocessors would have defeated the agendas of various parties.
THE STRATEGY: CAST AGRIPROCESSORS AS CRIMINAL ENTERPRISE
If a strategy was needed to keep Sholom Rubashkin in the government’s crosshairs and to legitimatize the harshest possible action against both him and Agriprocesssors, casting the meat-packing plant as nothing more than a criminal enterprise and a “shell company” was the perfect vehicle.
As such, the company’s owners were not entitled to any of its “ill-gotten gains” and government officials could legally seize all of Agriprocessors assets.
In addition, officials used the strategy to impose forfeiture claims on all Sholom Rubashkin-owned assets, including a chicken farm, a real estate corporation and even life insurance policies.
These assaults brought about the destruction of Agriprocessors and Sholom Rubashkin’s complete financial ruin. They also caused vast losses to the company’s lender bank from which Agri had borrowed millions. This too, was used to advance an agenda.
The bank’s losses, pegged in government papers at $26 million, were then laid at Sholom Mordechai’s doorstep. Additional charges were used to enhance the sentencing guidelines so that prosecutors felt brazen enough to call for a life sentence. This, for a non-violent, first-time offender who jurors had agreed did not personally profit from his alleged offenses.
IMPACT OF PROSECUTORIAL MISCONDUCT
The U.S. Attorney’s Office’s misconduct has placed Mr. Rubashkin in the difficult position of proving how much this misconduct magnified the “loss amount,” the 2255 motion filed this week argued.
“Mr. Rubashkin is forced to prove a hypothetical,” the brief asserted. “What would the sales price have been absent the [government’s] misconduct? How would that have reduced the guidelines requirements? Discovery will allow Mr. Rubashkin to obtain relevant information that would allow this calculation to be made to a level of certainty sufficient to meet guidelines requirements.”
The brief attached an expert economist report stating that without the government interference in the bankruptcy sale, Agriprocessors’ reasonably expected liquidation value would potentially have been as much as 26 million dollars higher.
In other words, Sholom Rubashkin should realistically have been able to repay his bank loan but thanks to government foul play, could not do so. His alleged offenses would have caused no loss of money to anyone and his sentence would have been vastly lower.
“Accordingly, Mr. Rubashkin should be granted leave to conduct discovery on this issue and a hearing, and ultimately, his sentence should be vacated and a new sentencing hearing granted,” the brief concluded.
“NO-RUBASHKIN” EDICT REPORTED IN THE PRESS
Countering prosecutors’ denials that they had employed a No-Rubashkin rule to scare off buyers are numerous press reports of the period, a sample of which follows below.
“The issue of possible ties to the Rubashkins would be crucial to the new company negotiating the purchase of Agriprocessors. Federal prosecutors, who have threatened to seize the business as part of their criminal case, reportedly have agreed to drop that effort if a new owner proves it has no links to the old owners.”
WCF Courier, June, 2009