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The Rubashkin Case: A no-spin, unbiased summary

rabbifink — Mon, 19 Sep 2011 19:00:33 +0000

I post this as a public service. (And a challenge to all the frum sites and newspapers to publish this summary.)

For a couple years now, the “frum” news sites and papers have reported a whitewashed version of the Rubashkin case. This has caused foolish outrage, claims of anti-Semitism, calls for the lives of the judges who presided over the appeal, condemnation of the criminal justice system and a gross double standard / hypocritical view of justice. All the frum media has been able to learn from this episode is not to trust the government and that we are a few logical steps away from Nuremberg Laws being applied to America. I have not seen one mainstream news article or editorial on honesty in business. Not one. This is understandable, because in the eyes of the frum community, Rubashkin is the victim of a blood libel and a contemporary Dreyfuss. In my opinion, this is reprehensible. We lose credibility as a community when we are not honest. But more importantly we are missing the greater lesson in all of this. Don’t break the law.

All the while, the frum community is footing the bill. (For an excellent review of why this case is not Pidyon Shvuyim I recommend an article written by Dovid Lichtenstein in the Spring 2011 issue of Hakira.)

This post is an attempt to set the record straight. Everything in this post is public record. Everything in this post is based on facts. There is no opinion in this post.

Rubashkin got a raw deal. He is a victim of a very punitive system. The system is imperfect. But those flaws do not kasher the reality of what happened. For more on my personal outrage over the extreme sentence levied against Rubashkin please read this: 27 Years Is A Harsh Sentence But Not The Only Harsh Sentence

What follows is free of compassion or vendetta. It is an attempt to portray pure fact. Please feel free to reference this post when discussing the case with others:

Rubashkin was convicted of 86 counts of bank, wire, mail fraud making false statements to a bank, money laundering and violations of an order from the Secretary of Agriculture. His sentence was 324 months (27 years) which was on the low side of the guidelines.

In 1999 Agri opened a line of credit with First Bank Business Capital. To secure the loan, Agri offered its inventory and accounts receivable as collateral. Meaning, the bank gave the loan assuming that Agri was making a certain amount of money. Showing a greater number in accounts receivable would increase the credit line and increase the risk for the bank. The loan was for about $30 million daily in 2008.

Agri inflated its accounts receivable in two ways. First, they fabricated invoices to increase the accounts receivable. These were not errors. They were deliberate. Some of the false invoices were to accounts that prepaid Agri, so no invoices were needed. Others were to accounts that sold no meat like a clothing store. Others reflected balances on accounts paid in full. Others just inflated the amounts owed. The court estimates that these false invoices fraudulently increased Agri’s credit line by $10 million.

The second way Agri inflated it’s account receivables was by depositing money that was supposed to be paid to the receivable account into a separate account. This gave the bank the impression that the receivable account was still owed more money than it was actually owed.

Also, Agri would pay down the loan with money that came into their account from the bank. Agri would take money from the operating account, deposit it into the Yeshiva which was funded by Rubashkin and a local kosher market. The school and market would write checks back to Agri and they were deposited into the bank account designated for accounts receivable. The bank would see these deposits and assume the money coming in was genuine income. This fraud gave Agri an additional $3 million in credit that was obtained fraudulently.

These acts were the basis for the money laundering charges.

Finally, the bank’s agreement with Agri required that Agri comply with the Packers and Stockyard Act of 1921. It did not comply with the Act so the loan was continued fraudulently.

The records of these acts of fraud date back to January 2008. Months before the raid on Agri for immigration charges.

The records of money laundering begin in November 2007. Again, far in advance of the raid on Agri for immigration charges.

In May 2008, Immigrations and Customs Enforcement (ICE) raided Agri and arrested almost 400 hundred employees for immigrations violations. Around that time Agri was notified that it was the also the target of a federal investigation for financial crimes.

In November 2008, Rubashkin was arrested and indicted on 163 counts. The aforementioned fraud related counts and 69 counts of harboring undocumented aliens for profit and variety of other escalations like conspiracy and aiding and abetting.

For efficiency, the court split the fraud related counts and the immigration counts. It decided to try the financial crimes first. Rubashkin objected. The court proceeded regardless.

One of the employees arrested in the raid asked that the judge (the Honorable Linda Reade) be recused from his immigration case because she was involved in the logistics of preparing the courts for the barrage of arraignments and cases following the raid. Literally, hundreds of defendants were tried in makeshift court rooms. The Chief Judge was needed to make the necessary arrangements. The court acknowledged involvement but as Chief Judge this involvement was minimal, necessary and not prejudicial.

Rubashkin’s trial team was aware of this issue and aware of the court’s deicision not to recuse itself from the other trial and did not pursue the matter further during trial. A deadline for recusal motions was also set. No motions were made by Rubashkin’s lawyers before the deadline.

The kind of conduct that the court deems grounds for recusal has been found in two situations cited by the court. In one case the U.S. Attorney who was investigating the case became the judge. He was required to recuse. In a second case, the judge actually met with prosecutors and assisted them with their case before the grand jury. Mere knowledge of the raid and logistical assitance in setting up the necessary arrangements for en masse criminal trial after the raid does not rise to the level requiring recusal.

During the trial for the financial crimes some evidence of the immigration violations that were considered relevant to the fraud was introduced. Some of the charges in the fraud case were predicated on Agri’s statement that it was not “in violation of any law, statute, regulation… which . . . would in any respect materially and adversely affect the collateral . . . or [Agri's] property, business, operations, or condition.” Since, the Bank’s collateral would be severely affected if Agri was violating immigration laws, and Agri was violating immigration laws, these violations formed the basis for 5 courts of fraud.

It has been argued that since Rubashkin was not convicted of immigration violations, the court should not have considered the immigration violations in the fraud case. The court argues that this is irrelevant. Individuals working for Rubashkin were convicted of immigration violations and were under his supervision. Rubashkin is culpable for those convictions as well.

The 27 year sentence has also been challenged. The prosecution and Rubashkin disagree on the amount of loss caused by the fraud. According to prosecutors the amount is $27 million and according to the defense it is $12 million. (Side note: this means that Rubashkin acknowledges that he is guilty of at least a $12 million fraud).

Rubashkin’s number is assessed by calculated how much extra money the bank lent him based in his fraud. The prosecution’s number is arrived at by calculating that number plus the default that Agri owed on the loan. The test to determine which number is used is a “foreseeabiiity test”. The court held that is was foreseeable that borrowing $12 million fraudulently would result in a default. Since it is foreseeable, the court properly considered that number when assessing the fraud.

As the to sentence, 324 months was on the low end of the range. The sentence was mitigated by Rubashkin’s circumstances as a father, first time offender and philanthropist. Without those factors the sentence would have been greater.

Another factor was Rubashkin’s lack of remorse during the trial. The perception of the court reflected the outrage of the community. In the orthodox Jewish community, Rubashkin was elevated to hero status as if he had done no wrong. This was consistent with Rubashkin’s refusal to cooperate with the government in their investigation and other trials. It also stands in stark contrast to other white collar criminals and even other defendants arising out the raid of Agri in November 2008.

Letters on behalf of Rubashkin were written by U.S. Attorney Generals and others. Their letters focused on the unfairness of the guidelines. They did not say Rubashkin was not guilty. They did not say that Rubashkin did not get a fair trial. They did not say the case was an example of anti-Semitism. Their complaint was limited to the general harshness of the sentencing guidelines. They did not say the guidelines were misapplied. They limited their criticism to the guidelines using Rubashkin’s case as an example of why the guidelines must be changed.

It should be noted that 90% of Federal cases settle. This is because the Feds rarely indict unless they are sure they are going to win. Of the 10% of cases that do not settle, the Feds win about 90% of those. One in a hundred Federal cases is won by the defendant. Rubashkin’s lawyers knew the score. If he had settled and entered a guilty plea and cooperated his sentence would likely have been 5 years or less (this is pure speculation but based on conversations with defense attorneys and prosecutors).

Tomorrow I will be posting my theory as to why Rubashkin has the blind support of the community. Stay tuned. (That post is going to be opinion)

UPDATE: And here it is –> How Did We Get Here? Explaining the Unabashed Support for Rubashkin

Sources: Sentencing Memoranda, Denial of the Appeal, News Articles

How Far Can the Police Go to Elicit a Confession? We’re not sure, but this is too far…

rabbifink — Wed, 09 Mar 2011 17:30:12 +0000

Sometime in 2007 a fellow named John Edward Dawson was arrested and indicted on burglary and drug possession charges. He was eventually found guilty of several charges. While incarcerated, Dawson was approached by another fellow who claimed to be a “Federal attorney”. He came promising Dawson’s release and he helped get Dawson’s car out of the impound. This fellow also elicited information from Dawson about other cases and urged Dawson not to speak with his appointed attorney.

When Dawson’s appointed attorney tried to meet with Dawson he was uncooperative. He told his appointed attorney that he had another lawyer so he wouldn’t need the appointed attorney anymore. The attorney had Dawson examined for insanity.

On the stand, one of the investigating officers let slip that it was he pretending to be an attorney who spoke with Dawson. It was he who told Dawson not to cooperate with this appointed attorney. Worse, his superiors has some knowledge of the charade but did nothing to stop it.

That is a big no no.

The Constitution guarantees the right to counsel. An officer of the government is prohibited from discouraging a suspect from seeking assistance of counsel. This is a basic right. The investigator deprived Dawson of his 6th Amendment right.

The Tennessee Court of Appeal reversed the judgment of the original case on these (and other) grounds. Good for them.

In my limited experience as a law clerk for the Public Defender I have seen the typical abuses of the investigators as used against their suspects. They tell outright lies. They make completely ridiculous and empty promises in return for cooperation. They threaten suspects. They keep suspects in interrogation rooms for hours and hours.

Suspects shouldn’t talk to the police at all. They should only speak through their attorneys. It is a huge, gaping whole in the criminal justice system. I believe that all suspects should be apprised immediately that they are under no obligation to speak with the police without an attorney present. But suspects like to talk. They talk and talk and talk. And usually get themselves into worse trouble than they would have if they had just kept quiet.

But Dawson’s saga goes beyond normative police practices. I hope that this will help raise some awareness regarding aggressive police tactics. It needs to stop.

HT: Rabbi Josh Yuter

Link: Reason.com

Truth in Advertising: Cigarettes

rabbifink — Mon, 11 Jan 2010 11:43:28 +0000

This is a Public Service Announcement.

Don’t Smoke. Smoking is very bad for you. If you are really cool, please do not smoke around kids. They will think you are so cool and your cigs make you so cool and they will want to be like you and they will start smoking too. You don’t want that on your head. Do you?

Cigarettes are a dangerous product. They are addictive and toxic. Worse, the cigarette companies have managed to cultivate a glamour and coolness associated with smoking that influences many people to take up smoking.

How do I know the tobacco companies are influencing people to smoke? Because advertising works. If it didn’t work, they wouldn’t be fighting about their rights to advertise. And, they are fighting…

A Federal Court in Kentucky just ruled in favor of the Tobacco companies. The court held that the law prohibiting color and graphics in cigarette ads violated the 1st Amendment (Free Speech) of the Tobacco companies. Advertising works, and it doesn’t discriminate. Children and teens see ads for cigarettes and the glamourous life of the smoker and they want in.

Whether the 1st Amendment can be used to advertise a deadly product is an interesting debate. David Lazarus of the LA Times has a 60 second rant about the subject that is worth seeing. Watch the video below.

The Good Wife: Unorthodox, From a Rabbi / Law Student Perspective

rabbifink — Wed, 11 Nov 2009 17:33:59 +0000

The Good Wife is a new legal drama on CBS. The show is great. Usually the legal issues are portrayed correctly (at least from a law student’s perspective) and the character development of the main character has been superb.

This week’s episode revolved around a chasidic couple living in Chicago who were responsible to fix a fallen eruv wire, but since it fell on Shabbos they had to wait until Shabbos had ended and in the meantime a woman claims she fell over the wire and is suing for 1.2 million dollars in punitive damages. The title of the episode does not refer to the couple, rather it refers to their lawyer with an unorthodox approach to law.

Read on for my comments, critiques and a HUGE PLOT HOLE.

The defense is based on the 1st Amendment, freedom of speech, and claims that the couple has the right to practice their religion and a jury should decide if they are liable when they believe it would be wrong for them to fix the eruv wire. That defense fails when the wife (a recent baalas tshuva / one who returns to Orthodox Judaism later in life) is found to have been making phone calls to her father on Shabbos. If she calls her father on Shabbos she should also be able to fix the fallen wire. Ultimately, the defense shows that the entire slip and fall was concocted and the jury finds for the defense.

You can read a full synopsis of the episode here or, even better, you can watch the show (at least for the time being) on CBS.com.

The portrayal of the chasidic community, the laws of eruv and the relationship between the chasidic couple were pretty good. BUt there were a few things that they got wrong. It is so funny to me that any orthodox Jew would notice the nuances that are incorrect but the entire staff of the show does not see the mistakes. Ironically, last week’s episode of The Good Wife revolved around a witness who could not tell the difference between 2 black men. It seems that people from other ethnicities have a hard time seeing the nuances of other ethnicities. It is no different when Hollywood tries to portrays Jews. They simply don’t have the sensitivities to the finer details of orthodox Judaism, especially chasidic Judaism.

Things They Got Mostly Correct

The chasidic garb. She was wearing typical women’s dress. Subdued colors and very modest. He was in black and white with his hat nearby at all times.

Strollers. Everyone had strollers in the chasidic neighborhood.

Kosher markets. There was a kosher market within walking distance.

The shomrim guy. He looked like every non-chasidic Hatzalah (Jewish volunteer ambulance core) guy I know.

The intimacy between the couple. Most couples on the show celebrate victory with public hugs and kisses. The chasidic couple did not embrace in public, but their connection was displayed by touching each other’s hands secretly.

Mistakes

The chasidic guy never smiles. That is just not nice.

The chasidic guy has a “tchup”(coiffed hair), chasidic men have hair that is cut very short.

The chasidic guy has a trimmed beard, that is not common at all.

The chasidic guy has a RING! (I mean, come on, that’s an easy one!)

They say an eruv “creates a symbolic courtyard“, that’s not quite true, an eruv joins many domains into one common domain by surround the entire community with a wall. (But that is a hard one.)

A young chasidic boy has a leather kipa perched awkwardly on the back of his head.

Something That Bothered Me

The wife was a twice rehabbed drug loving party girl who found chasidic Judaism while incarcerated. Showing her revival as a chasidic Jewish woman bothered me slightly. It was if to say, one has to be so crazy to find chasidic Judaism attractive. Maybe I am nitpicking, but it bothered me just a little.

HUGE PLOT HOLE

When the plaintiff got injured it was Shabbos. She was asked why she was walking through this neighborhood and she said she was going to the market. She was asked why this market if there are four markets closer to her home and she said because this market is the kosher market where they sell gluten free products.

Do you see the problem? (answer below)

This is an inexcusable error. CBS, next time you want to do a show with chasidic or Orthodox Jewish characters and plot elements you can hire me. I will be your rabbinical consultant and make sure you get it right.

The Good Wife is a great show. One of the reasons it is great is not the attention to detail. A twitter buddy of mine also noticed a legal problem a few weeks ago. I guess when you are law student and a Rabbi you are going to notice the mistakes of Jewish culture and law.

(Plot hole answer: The kosher market is closed on Shabbos. She could never be walking to a kosher market on Shabbos!)

Read this blog post by @matthue about his experience as an extra for the episode!

Crosses Honor Fallen Soldiers of All Faiths

rabbifink — Mon, 19 Oct 2009 07:01:43 +0000

We took the family to Santa Monica Pier on Sunday and our six year old son proved to be smarter than a Supreme Court Justice!

It is so beautiful to walk along the beach and observe all the excitement along the boardwalk and pier. As always, we had a great time in Santa Monica.

For the last few years there has been a protest / exhibit just north of the pier. The protestors are against war in general, the Iraq war in specific and pretty much the entire defense budget of the United States.

They call it Arlington West and they have set up a faux graveyard in the sand representing the fallen soldiers in what they call a criminal war.

It can be quite powerful when you see it.

As we walked by the lines and lines of crosses on this occasion, my 6 year old son asks, “How do they know all the soldiers who died were Christian? If they were Jewish or Muslim or ‘nothing’ they probably wouldn’t want a cross.”

Excellent point kiddo! Score one for the six year old.

In fact you may have heard about this exact issue arising in the Supreme Court of the United States in Salazar v. Buono. The issue in the case is an eight-foot high cross that was erected as a memorial to fallen soldiers in foreign wars.

The case made recent headlines when Justice Scalia could not fathom that a non-Christian would perhaps be offended by a Christian symbol as a memorial for the dead. The exchange between Justice Scalia and ACLU lawyer Peter J. Eliasburg went something like this:

JUSTICE SCALIA: The cross doesn’t honor non-Christians who fought in the war? Is that — is that –

MR. ELIASBERG: I believe that’s actually correct.

JUSTICE SCALIA: Where does it say that?

MR. ELIASBERG: It doesn’t say that, but a cross is the predominant symbol of Christianity and it signifies that Jesus is the son of God and died to redeem mankind for our sins, and I believe that’s why the Jewish war veterans –

JUSTICE SCALIA: It’s erected as a war memorial. I assume it is erected in honor of all of the war dead. It’s the — the cross is the — is the most common symbol of — of — of the resting place of the dead, and it doesn’t seem to me — what would you have them erect? A cross — some conglomerate of a cross, a Star of David, and you know, a Moslem half moon and star?

MR. ELIASBERG: Well, Justice Scalia, if I may go to your first point. The cross is the most common symbol of the resting place of Christians. I have been in Jewish cemeteries. There is never a cross on a tombstone of a Jew. (Laughter.)

MR. ELIASBERG: So it is the most common symbol to honor Christians.

JUSTICE SCALIA: I don’t think you can leap from that to the conclusion that the only war dead that that cross honors are the Christian war dead. I think that’s an outrageous conclusion.

MR. ELIASBERG: Well, my — the point of my — point here is to say that there is a reason the Jewish war veterans came in and said we don’t feel honored by this cross. This cross can’t honor us because it is a religious symbol of another religion.

(Credit: Huffington Post)

DovBear posted about this last week (Impeach Scalia) click for discussion there.

What amazes me is how my 6 year old son can see something so patently obvious and yet Justice Scalia can’t seem to process the concept…

Incredible.