Full Report from South Dakota: Matzav Exclusive Roundup of Day 2 – Rubashkin Federal Trial Starts


rubashkin-courtcase-3Yesterday was the second day of the Rubashkin trial in Sioux Falls, South Dakota. Jury selection was held on Tuesday and yesterday opening statements were given and Federal prosecutors began presenting their case.

The following are some anecdotes from the Matzav.com reporter on site covering the trial at the US District Court on S. Phillips Avenue off of West 12th Street in Sioux Falls.

As reported here, the trial is being held in the courthouse in Sioux Falls after the federal judge in Iowa accepted a defense motion arguing that potential jurors in the state were unduly influenced by media coverage of the case. 

Reb Shalom Mordechai Rubashkin, the 49-year-old former vice president at Agriprocessors, is facing 91 criminal counts, but his legal team, led by noted attorney Guy Cook, is cautiously confident that the truth will emerge about the allegations, and that the jurors will see the half truths and the misrepresentations of the prosecution.

Cook told the court that Reb Shalom Mordechai is an “honest family man” who was in over his head in a complex business. Reb Shalom Mordechai was trained as a rabbi, not a businessman, and that any alleged “sloppy” business practices that might have occurred – it has yet to be proven by the prosecutors – don’t amount to crimes.

In May 2008, federal immigration officers raided the Agri plant in unprecedented and unparalleled fashion and arrested nearly 400 undocumented workers. In October 2008, Reb Shalom Mordechai was arrested and charged with conspiracy to harbor illegal aliens and other crimes.

Assistant U.S. Attorney Charles J. Williams, the Matzav.com reporter in Sioux Falls says, showed photos and slides to the court attendees as he unveiled the government’s case against Reb Shalom Mordechai. He claimed in court that Mr. Rubashkin “repeatedly lied” to his lender about his company’s financial health and “reassured the bank that Agriprocessors was in full compliance with the law.” But, as the Matzav.com reporter in Sioux Falls tells us, these claims are far from the truth.

The Matzav.com reporter relates:

“The prosecution, predictably, tried to impress and shock the jury with big and scary words. Attorney Cook, in his remarks, told the jury that the prosecution’s goal is to shock and awe, but that, of course, there is the other side of the story, the defense, which won’t be heard for several weeks until after the prosecution completes presenting their case.

“Mr. Cook, on Tuesday, shared with the jury a moshol, a parable, to bring out his point. He said that they’ve all heard of Santa Claus. As children, they grew up believing in Santa Claus. They would go out as children and see pictures and other items depicting Santa Claus. They believed Santa Claus was real – and why shouldn’t they? The proof that he exists was wherever they looked. But then, said Cook, when they became adults, they learned the other side of the story – the reality, the truth. There is no such person as Santa Claus – despite all the ‘evidence’ they heard and saw in their youth.

“Continuing on this theme on Wednesday, Cook told the jury that even though for weeks they will hear things from the prosecution, which will create images and impressions, there will come a time – if they can maintain an open mind – when the rest of the story will be related. Think about the Santa Claus analogy, he said. Not always do you have the facts in front of you, as convincing as the evidence may sound now. The facts often emerge later, and that is what will take place here in the Rubashkin case, he said.

‘The story you heard [from the government] is not fully accurate,’ Cook said. They ‘used charged words…for a purpose: to shock and awe you, to divert you from the truth.’

“Guy shared with the audience the history of Postville and told the jury the true nature of Reb Shalom Mordechai’s position at Agri, unlike what the prosecution wishes to claim. The company, he said, was founded by Reb Shalom Mordechai’s father, Aaron Rubashkin, in rural Postville in the late 1980s. The elder Rubashkin, a kosher butcher who had emigrated from Russia, saw opportunity in restarting a shuttered plant near a plentiful supply of cattle and was massively successful before Reb Shalom Mordechai ever came on board. Then Reb Shalom Mordechai’s father asked him to come and join the business, which he did to satisfy his father’s request.

“Cook said that Reb Shalom Mordechai was ‘a kid from Brooklyn”‘ with no business experience.

“The company had been headed by Mr. Donald Hunt, the plant manager, who truly ran the company. When Hunt died in the late 1990s, Hunt’s various responsibilities were spread to employees of the company, including Reb Shalom Mordechai.

“There were different people in the organization above or on the same level as Reb Shalom Mordechai, but the government, in their case, decided that Reb Shalom Mordechai was the head and the brains behind anything going on at the company. They are trying to paint a black picture and pinning it, incorrectly, on Reb Shalom Mordechai.

“And the truth is, as the defense explained, that it was a very successful business for 20 years.

Agri was doing $350 million in sales at its height, spreading kosher meat throughout the U.S. to places that had never had kosher fleish. Cook characterized Agriprocessors as a ‘true American success story’ that contributed to charity and helped boost Postville’s economy.

“Cook told the court that Reb Shalom Mordechai and his family are solid citizens – and that this isn’t his opinion; it’s the opinion of the governor of Iowa and the mayor Postville who have vouched for Reb Shalom Mordechai’s honesty and integrity.”

Prosecutors allege that Rubashkin violated a 2002 order by the U.S. secretary of agriculture to pay cattle providers within 24 hours of a sale. The charge stems from a 1921 law, the U.S. Packers and Stockyards Act. The law requires “prompt payment” to protect livestock producers. Two scholars who studied the law said they had never seen it invoked in a criminal case.

“This is the first time in my life that I’ve heard of that,” said Chris Kelley, a University of Arkansas law school professor.

The Matzav.com reporter comments on this:

“Attorney Cook addressed this absurd charge by adding that the livestock producers themselves, to this day, have a positive opinion of Reb Shalom Mordechai and have said that his ‘word is gold.’

“Agri always paid fair money and the cattle people were happy with the arrangement. The government is trying to enforce a law that has never been evoked and that has not been called into question by the cattle producers themselves!”

The prosecution shared the government’s claim that Reb Shalom Mordechai “engineered a scheme that illegally diverted millions of dollars in customer payments away from First Bank Business Capital Inc., a subsidiary of St. Louis-based First Bank, which had issued him a $35 million revolving line of credit.”

The Matzav.com reporter comments:

“Attorney Cook explained that the bank knew full well what was going on and how the company was running. And they were quite satisfied with their arrangement with Agri. They never had a problem. The company had taken out a $28 million revolving loan with First Bank Business Capital in 1998. The loan grew to $35 million, and the company could borrow against it daily. After the immigration raid, Agriprocessors faltered financially, and the bank called the loan. The company declared bankruptcy in November.

“The bank had been profiting greatly from the interest payments, which they always received. Never was a payment missed. It was clearly a risky loan in the first place, because kosher meat is a volatile and unpredictable business with a limited profit margin. But banks always make risky loans in order to make a profit, and the bank went with it, with their eyes open, because they had a lot to gain. To claim that Agri tricked the bank is false, said Cook, as the bank was happy with the arrangement, and in fact, if not for the May 2008 raid, would have doubled their money! The bank was more than happy to advance money to Agri because the Rubashkins always made their loan payments.

“Importantly, Mr. Cook told the audience, to this very day, the bank, First Bank Business Capital, on its website, lists Agriprocessors as one of its successes! So the bank never had a problem with the arrangement.”

The government also alleged that Agriprocessors made false statements to the bank by assuring officials that they were in compliance with federal law. Rather, Mr. Williams said, Agri violated the federal Packers and Stockyards Act by failing to promptly pay cattle suppliers and by employing illegal aliens.

The Matzav.com reporter comments:

“Once again, Attorney Cook addressed this and stated that First Bank Business Capital, even after these allegations were made – and even after the May 2008 raid! – continued to lend money to Agri, so to claim noncompliance and to claim that the bank was lied to is simply not true. The bank was aware of the company makeup and how it was being run, but chose to continue lending money for its own benefit. There was no misrepresentation of any kind on the part of Agri.”

Some other details from the Matzav.com reporter:

“Cook shlepped in a library cart full of evidence, saying that the defense will show the jury evidence on top of evidence to prove Reb Shalom Mordechai’s innocence.

“The prosecution lobbed their charges of money laundering, but as Cook explained, the money went in a circle, not in a straight line. There was never any laundering or anything close to it. The charges are simply bogus.”

Yesterday afternoon, prosecutors called three witnesses who claimed that about $10 million in invoices were not connected to any shipments made from the plant. Angela Smith, a computer consultant, was called to the stand.

The Matzav.com reporter comments:

“Cook cross-examined Smith and quickly got her to admit that she had never even met Reb Shalom Mordechai and that the last time she spoke with him was some 7 years ago. It was not a very impressive showing on the part of the prosecution.

Two other people testified as well. Mark Ross and Alan Rice were both part of the trustee group that ran the company after it filed for bankruptcy. The prosecution tried to get these witnesses to state that they had found discrepancies, but during cross examinations, the men had to admit that they didn’t know many things about the company and the business. In fact, after being appointed by the Bankruptcy Court, they milked the company for hundreds of thousands of dollars to run it. In addition, they sold inventory for way below market price. They were less than stellar in their testimony, to say the least.

“Rice also admitted that some of his info had been gotten Mitch Meltzer, a former employee of the company trying to get a reduced sentence by portraying Reb Shalom Mordechai as being guilty of all sorts of things. Rice thus admitted that the key information was based on misleading details given by Mitch.”

 {Noam Amdurski with Dovid Bernstein-Matzav.com Newscenter, Reporting by Matzav.com reporter in South Dakota)


  1. May the Ribono Shel Olam continue to help Reb Sholom Mordechai, as we do our hishtadlus, and he will Be”H always be with his family

  2. Yasher Koach Matzav for keeping us up to date of what is going on at the trial. The truth is coming out. We should continue saying tefillos for the Rabashkin family. The truth will prevail!