Original subtitles

In this episode of American Greed, the Brooklyn family business

that saved an Iowa town.

There's money flowing into the community.

But there are whispers of threats, extortion, and shocking child labor

The only way to make that business work was to exploit the workers.

Propping it all up, a massive $26 million financial fraud.

It's dizzying watching the money go around. I mean, it's a very complicated

game. The man at the center of it all, Shalom Robushkin.

Dutiful son or corporate crook?

May 12, 2008.

Sirens shatter the morning stillness as federal and state agents swarm into the

tiny northeast Iowa town of Postville.

600 agents wearing the black riot -type gear, some with automatic weapons, a

Blackhawk helicopter circling above, and they arrest people at work and put them

in chains.

Soon, nearly 20 % of Postville's population disappears, and agri

once the nation's largest kosher meat supplier will spiral into bankruptcy.

And that's just the beginning.

It was like cleaning out a cesspool, and when you get to the bottom, you think

you've reached the bottom, and you pull the cover off, and there's another

cesspool underneath that, and another one, and another one, and another one,

another one.

AgriProcessors begins 20 years earlier.

and over a thousand miles away in what might as well be another world,

New York.

Sixty -year -old Russian immigrate Aaron Rubashkin settles in the Orthodox

Jewish community of Borough Park and grabs his piece of the American dream.

Over time, he buys a textile firm and other businesses.

But it is the family's small kosher grocery store that catapults them to

prominence.

They're known for their kindness in the Orthodox community.

They have a very nice and generous nature unless you're doing business with

them.

Rabashkin's biggest challenge is providing affordable kosher meats to the

community.

The family was very committed to providing kosher meat for American Jews.

I think that they really saw this as part of their religious responsibility.

But there's a problem.

By 1988, his suppliers are too unreliable and too expensive.

Rubashkin decides to eliminate the middlemen.

They saw this as an opportunity to, you know, become the major suppliers across

the country of kosher meat.

He scours the country before finding a suitable slaughterhouse in the small

of Postville, Iowa.

Renamed agri -processors, it is the beginning of what will become a kosher

dynasty. The idea was to produce

Kosher meat on a large scale, people have likened it almost to the Walmart of

kosher meat because it was massive amounts of kosher meat that were being

produced.

The impact on Postville is immediate.

There's money flowing into the community.

I mean, all of a sudden the banks have money to lend because there's money

flowing through the bank.

All of a sudden commerce is building up. This place is green.

Brooklyn -based Aaron Raboshkin enlists family to manage the Iowa plant. In

1992, he brings in his son, Shalom Raboshkin, to become vice president and

day -to -day operations.

None of them had any business background, other than hands -on

None of them had ever run an operation like a slaughterhouse, had that many

employees, had to deal with U .S. government regulations and all this

stuff. None of them had ever done that.

Each week, 1 ,300 cattle, 225 ,000 chickens, 700 lambs, and 4

,000 turkeys are trucked into the plant.

And each week, 1 .85 million pounds of product ships out to supermarkets across

the country.

Agro -processors took a national approach of distributing it almost to

single place where a person wanted to buy it in the United States. It never

existed before then.

It's a niche market, but a very lucrative one.

AgriProcessors' annual sales eventually topped $300 million, and Shalom

Raboshkin is at the center of it all.

Frankly, he was in over his head. He didn't have the professional skills that

one would expect of a business like that.

To keep costs down, AgriProcessors does whatever is necessary to survive.

AgriProcessors has...

developed almost from the outset, I think, a reputation as being a place

corners got cut, where a lot of regulations were ignored or people

other way.

They discourage unions and labor organizers.

The management was very aggressive in sort of tamping down the union efforts.

It was a battle that kept flaring up from time to time.

But the first real hit of trouble doesn't occur until 2003, when PETA,

for the Ethical Treatment of Animals, releases a graphic undercover video

during slaughter.

We documented the worst abuse of animals that any of us had ever seen.

They had their esophagi ripped out, and then they were dumped onto the floor,

still conscious.

The most graphic portions of this video have been blurred, but these disturbing

images appear to be extreme violations of Jewish kashrut laws, requiring kosher

animals be killed without suffering.

The Rubashkins sort of stuck their fingers in their ears and screamed, no,

no, no, no, everything's fine.

The Rubashkins argue the slaughter is humane and that it is impractical to

processing for alleged kosher infractions.

Every time it stops, the whole, you know, that's money flying out the window

the plant.

Agri -processors and Shalom Rabashkin weather the bad press, and eventually

controversy dies.

Nobody was fired. Nobody was meaningfully disciplined.

The report came out, and it said, boy, this place was horrible.

We probably shouldn't do that again.

And it was over.

But the disturbing PETA video is only the beginning.

Up next on American Greed, soon investigators will uncover a stunning

million financial fraud and shocking allegations of worker exploitation.

This company in Iowa has a large number of undocumented workers, and those

workers are being terribly abused.

By 2004, Kosher Slaughterhouse Agri -Processors has become the largest

in Postville, Iowa.

Agri -Processors grew leaps and bounds, and they're employing well over 1 ,000

people. And for a town of 3 ,000, that's extraordinary.

It was really a large provider of jobs for the town, and the town came to rely

on it.

Overseeing the operation is Shalom Roboshkin, son of Agri -Processors owner

sole shareholder Aaron Roboshkin.

Under his watch, AgriProcessors supplies 60 % of the nation's kosher meat and 40

% of its kosher poultry.

He was driven to keep the company going. He had very grandiose dreams about

where this company was going to go.

As AgriProcessors thrives, so does Shalom's stature in Postville.

When you talk to folks in town, it's, you know, yeah, sure, they had a city

council, they had a mayor, but...

A lot of people really saw Shalom as the most powerful man in town.

Slaughterhouses were closing up at an accelerated rate through the 80s.

Shalom, seen in this PBS video with his family and neighbors, lives on the

outskirts of town with his wife and 10 children.

Shalom didn't have any of the vestitures of wealth, no jacuzzi, no jet plane.

He walked around in old clothes. His cars were banged up.

But his family does enjoy the prestige that running a small town's biggest

employer provides.

They had very nice homes. They lived a very nice, although not flashy,

lifestyle.

And much nicer and much better than any of their employees, obviously, were

going to be living.

Rabashkin helps build the necessary infrastructure to make Orthodox Jewish

possible in a small town.

How do you attract people to come to Postville, Iowa? Well, you have to have

school for the children. There has to be a synagogue.

And there has to be someplace they can get kosher food. And Robushkin provided

all of that.

But Shalom's generosity and his family's lifestyle comes with a hidden price

tag.

Like many meatpacking companies, AgriProcessors exists with a sort of

don't tell approach to labor hiring.

You're working with sharp knives, saws, and bizarre contraptions that can do

extreme damage to a human body in a very slippery, dirty, and often

unpredictable environment.

The work is ugly, bloody, and monotonous. The pace is relentless, and

are common.

It's not a place you want to be if you can be somewhere else.

The industry often relies on undocumented workers to fill shifts and

dirty work.

Agri -processors is no exception.

For a business the size of agri -processors, who needed close to a

workers, you can never get that many locally.

Most of the labor force comes from Mexico and Guatemala.

The attitude, I think, was whatever we're doing for them is better than they

before.

Illegal workers need fake documents, and evidence suggests Shalom Rabashkin does

not just turn a blind eye. He actively encourages the practice.

He was involved intimately in the obtaining of identification

cards for illegal immigrants who weren't able to work.

But others argue Rabashkin can't be held responsible for the hiring practices of

his subordinates.

Shalom Rabashkin was not the human resources department at AgriProcessors,

so he was relying on people to screen the applicants, and those people were

fooled by some very determined applicants who wanted to get into the

get jobs there.

To meet payroll, AgriProcessors pays some undocumented workers off the books

cash.

When Social Security complains about discrepancies, Shalom Rabashkin

his HR department to get creative.

He is the one who decided to start what's called the Hunt Payroll.

The hunt payroll is an under -the -table accounting scheme that allows Rubashkin

to continue hiring and paying illegal workers.

When people came in that could not be e -verified or could not meet the

requirements of being legally employed by an employer in the United States,

would go then on to the hunt payroll.

On the surface, the arrangement works well for all parties in Postman.

They were growing, and the economy was growing, and houses' values were

Real estate was being bought up, and there was businesses opening right and

left.

Nobody wanted to upset the apple cart.

So if there was something a little bit wrong,

close your eyes to it. It's not that big of a deal.

But there are rumors that things are not what they seem inside the plant.

The presence of an undocumented worker population is, to some degree, an

invitation to exploitation.

Worker pay is low, above minimum wage, but below industry standards.

It's long hours. It's not high pay. And I think that's just the truth.

But that's far from illegal, and that's far from exploitive, and it's far from

unethical. It's just what it is.

The company avoids overtime by putting workers on multiple payrolls.

People who are working 60 or 70 hours a week and on their paycheck would have 40

hours from agri -processors and 30 hours from a cleaning company so that there

wasn't the need to pay them overtime.

And there is no real way to complain because there are always more desperate

illegal workers waiting to be hired.

These people were vulnerable.

They're undocumented.

Who were they going to complain to?

They're going to go to a government official?

They're not going to go to anybody.

And they knew it.

But low pay and shorted hours are the least of agri -processors' problems.

Next on American Greed, allegations of sexual abuse, employee mistreatment, and

deplorable working conditions stun the outside world.

The Jewish community was shocked.

out of its mind. People could not believe that this was going on.

By 2006, AgriProcessors, the nation's largest kosher slaughterhouse, is

thriving. But rumors suggest there are serious problems that CEO Shalom

Nabashkin seems unwilling to fix.

The management was horrible.

Horrible decisions were being made. And as things started to heat up, one would

think that you would surround yourself with professionals who could bring you

out of this.

Unions at competing plants complain to the Jewish Labor Committee about unfair

and dangerous labor practices.

They're being short on their paychecks. There's physical abuse.

There's a very high accident rate.

And a scathing 2006 newspaper article makes even rabbis, who previously

supported the Lubashkins, take note.

It was about a bad business plan gone awry. And it was... A sense that

we could squeeze the margins so much that the disregard for human beings, for

animals, for the earth was significant enough that they didn't have any choices

anymore but to squeeze the margins as much as they could.

A commission of inquiry composed of five rabbis and Jewish labor activists

visits the plant to find the truth.

To save face, Rubashkin reluctantly agrees to meet with them. But things get

to a rocky start.

We had asked Sholem Rubashkin to sign a non -retribution agreement that would

allow us to talk to workers in the plant without their being afraid that they

could be fired.

We handed them the letter, and Sholem said, I won't sign anything.

Management denies there are problems, and a tour of the plant offers little

insight. When we walked through the agroprocessor plant, everybody was

at the ground.

Nobody looked at us. Nobody talked to us. Nobody was smiling.

Later, we found out that they were told not to say anything, not to talk to

them. If you did, you'd be fired.

The commission tries talking to workers off -premise.

but soon realized just how long the company's reach is.

We noticed that people were sitting out in the parking lot taking pictures,

writing down numbers of cars, license plate numbers.

You had the feeling that this was the idea of a company town run by the

and the company goons watching you.

Over two days, they speak with nearly 60 current and former employees.

This wasn't the first time I've been involved in that kind of a situation.

This was, however, probably the worst situation I think I've ever seen.

Employees recount stories of being forced to work in dangerous and

environments.

We met a young man who told us that he gets headaches and he gets nosebleeds

cough.

I said, where do you work? He says, I mix chemicals and I use chemicals to

the plant.

I said, do you have a breathing mask?

I don't have a breathing mask.

Horrible injuries, sometimes even amputations, are common.

We heard about a terrible accident that occurred a year before where a man lost

an arm in a meat grinder.

He was cleaning out the meat grinder and somehow, mysteriously, the machine went

on and he...

Lost an arm.

There are also serious allegations that many of the plant workers are underage.

The federal law is that you have to be 18 years old to work on a killing floor

in a meatpacking plant. We met with kids who were 16 years old.

We had one night supervisor who testified that it was like walking into

high school gymnasium when he went to work each night.

These children routinely work with harsh chemicals, solvents, and sharp knives.

Some as young as, I think, 15, 16, who were working with poisonous chemicals,

with dangerous machinery, things that are really designed for adults.

But just how they got their jobs and how much Roboskin knows about them is

debatable.

The witnesses were unanimous in saying that they had all lied to agri

-processors about how old they were when they got the jobs, and they all got

phony identification documents, phony green cards, that showed them as being

older than 18 at the time that they applied for the jobs.

Workers of all ages tell of a hostile environment.

The attitude towards workers were that they were disposable.

that could be just thrown away.

There'll be others.

There'll be more. There are always more illegal, undocumented workers trying to

get in.

Postville seems to have become a company town in the worst sense.

And the Rubashkin family controls what happens outside agri -processors almost

as completely as what happens within.

Like any good company town, one of the things you need is housing for the

who are going to come and work for you, most of whom cannot buy a house.

because they don't have the established credit and they don't have the income in

order to buy it.

Aaron Rubashkin, Shalom's father and actual owner of AgriProcessors, also

company that manages employee housing around Postville.

While Shalom's family lives in one of the largest houses in town, his

face a different reality.

The apartments themselves were often substandard.

Sometimes the plumbing didn't work, the heating didn't work.

The Rubashkins are the town's largest employer and landowner.

Now they've become one of its biggest landlords as well.

That gave the Rubashkin family and agri -processors a tremendous amount of

control over workers' lives.

After two days of disturbing interviews, the Commission of Inquiry has heard

enough. They offer Rubashkin recommendations to begin cleaning up

-processors. John Rubashkin said your concerns...

resonate with our concerns, but we've addressed these in our own way. We've

decided to handle it internally.

Thank you very much.

Perhaps there's a reason why Rubashkin isn't worried about worker problems.

Once you're under the gaze of the government, you're in big trouble.

Next on American Green, while his employees are barely scraping by...

Shalom Rabashkin's been playing fast and loose with the accounting books and

conducting a $26 million game of musical chairs.

It was an onion of many layers, and I can't imagine how he was able to keep it

all straight.

Agri -Processors is the largest kosher meat packing plant in the U .S., with

revenues of $300 million annually.

And CEO Shalom Rabashkin is living the good life. But the reality is the

is actually teetering on the brink of insolvency.

It's mind -boggling. It's untenable for a long period of time.

To survive, they have relied on a $35 million revolving loan with First Bank

Business Capital of St. Louis.

A substantial amount of capital is necessary to keep a business like this

running. That capital, a large part of it, came from this operating loan of $35

million, which they had never missed a payment on, which they had honored 100%.

The loan amount is determined by accounts receivables and inventory on

hand. But AgriProcessors has been routinely lying to FBBC about just how

valuable the company's assets really are.

At the direction of Shalom Rabashkin, a member of the agri -processor staff

would create a fake invoice.

They would then submit that to the bank and be able to borrow more because of

that invoice.

To support these fake invoices, Rabashkin also creates fake bills of

trucks leaving agri -processors.

In other words, yes.

There's this invoice, but look, there's a bill of lading that says that a truck

went out with it. So how could it be fake?

The more collateral, real or imagined, the more agri -processors can borrow.

It created the appearance to the bank, at least, that the plant was owed this

money from customers who just hadn't paid yet. That debt from customers to

plant could be used to secure advances on the credit line.

To perpetuate the scam, agri -processors must somehow pay off these fake

outstanding invoices within 60 days.

They would have to collect that fraudulent receivable, or else it would

ineligible and the bank would say, well now you don't have as much receivables

to borrow, you need to pay me back some money.

One way to do that is to take money from legitimate receivables and apply that

to the fraudulent invoices.

But then pretty soon, now that other customer who paid you for those

now his invoices are never going to get paid and they're going to age out

slowly. So they have to take cash from somewhere else and pay that.

And it just kept building on itself and building on itself.

Dubashkin also begins funneling large sums of cash through two local

to hide AgriProcessor's money.

There's a little kosher grocery store in Postville that received about $10

million. And you can buy and sell that place about 30 times over for $10

million.

Other money is dumped into the local Jewish school where agri -processors'

rabbis send their kids.

I think it was just a shell game, as best I can tell. You know, we've got $80

,000, let's put it somewhere. And when we need it, we'll get it back.

When the Raboshkins need money, they have these and other companies write

rounding checks, large, even numbered deposits that won't attract attention.

They had companies in the local area that they controlled.

They would write a check to them, then immediately turn around and write a

back from them. And they would deposit the check back from the company into

their depository account.

It's a $35 million version of an old con called check -kiting.

That is, taking advantage of the float or the time it takes a check to clear

when there are insufficient funds.

You know, it takes a check a day or two to clear.

That's how they were paying off these fraudulent receivables with their own

money. Most of the diverted money is actually used to pay for agri

operational expenses and to keep the company afloat.

The money went in a circle.

It didn't go in a straight line.

It was loaned by the bank, it was used to operate the plant, and it went back

the bank. It didn't go anywhere, but either back into agri -processors or

to the bank.

From January 2007 through September of 2008, Rubashkin directs subordinates to

divert nearly $25 million in customers' checks.

It's dizzying watching the money go around.

He pulled it from a million places. The world, it seemed, or at least northern

Iowa, was Shalom Rabashkin's piggy bank.

You can't keep up a scheme like that for very long. You just run out of money.

Using bogus accounting, AgriProcessors borrows on average over $1 million a

month between November 2007 and October 2008.

I can't comprehend how he could keep track of it.

quite frankly, because it's been a two -year journey for us to attempt to get

our arms around it.

During the life of the fraud, AgriProcessors continues to pay interest

$35 million loan.

In fact, over 10 years, they have paid nearly $22 million in interest alone.

The bank was loaning money, taking the interest.

Loaning money, taking the interest.

As long as their loan was being paid, they were happy to...

Make the loan.

Agri -processors might be tricking the bank, but not everyone is fooled.

Coming up, agri -processors finds itself the focus of several converging federal

and state investigations.

I don't think they had any concept of how much trouble they could be in.

And at the center of it all is Shalom Rabushkin. For some, he's the savior of

community. To others, he's the devil in disguise.

By 2008, Shalom Raboshkin is at the center of a massive deceit to keep

AgriProcessors, his father's kosher meat processing company, solvent.

He's dug himself in deep by hiring illegal workers to operate his

slaughterhouse.

You're responsible as CEO for everything that happens in that company.

You have to know what's going on. You have to be there. You have to be aware.

That's what you're paid to do, not being aware.

is very problematic.

Rubashkin and his accountants have also engaged in a massive and confusing

financial fraud.

Most of the money keeps agri -processors running, but some simply disappears.

Family, friends, and Jewish charities seem to benefit from mysterious outgoing

agri -processors' checks.

Everybody wanted a piece of this pie. Everybody in the family wanted a piece

this pie.

And Shalom Rabashkin himself benefits as well.

During a two -year period beginning in 2006, the government alleges Rabashkin

funnels about $1 .5 million from agri -processors into his personal accounts.

He was also pumping it into a number of personal expenses, jewelry, coins,

things that had some significance to his religion as an Orthodox Chabad

Lubavitch Jew.

He paid personal credit card bills with it.

Paid health insurance with it. He did all these other things with the money.

How you can say this is not about greed, I don't know.

It was certainly about greed.

It's just that it was greed that was mixed with religion.

But this fraud is behind the scenes.

It's the labor violations that are drawing more public attention.

And other allegations in the plant are more disturbing.

There are reports of sexual harassment and even rape.

But just like the immigration and child labor violations, management turns a

blind eye.

It was systematic to the culture. And there were also, yes, one or two

supervisors intensely engaged in sexual harassment of female workers and engaged

in perpetrating sexual assaults, actual rapes upon these same workers.

In exchange for better shifts or higher pay, some women are allegedly forced to

provide sexual favors for supervisors.

There were supervisors forcing girls into this, having sex in the plant,

in the supervisor's office, which is unbelievable.

Because investigators have limited access to victims, it's impossible to

how many women were abused.

Personally, I was able to establish two different instances where I sat one -on

-one with female workers, undocumented workers who had been

victims of sexual assault while employed at agri -processors.

And Sholem Rabashkin, of course, had no idea that this was going on, he'll tell

you, none, none whatsoever.

In March 2008, OSHA cites agri -processors for 39 worker safety

Then, the Iowa Department of Labor subpoenas agri -processors, naming

underage workers and requesting personnel files.

He was amply put on notice time and time and time again that there were kids

working in that plant.

And at some point, it was no longer reasonable for Mr. Braboshka not to

investigate those allegations.

Agri -Processors also begins regularly receiving no -match letters from the

government. A no -match letter is essentially a letter from the United

government and immigration saying, listen, we have these payroll reports

you. And the social security number listed does not match the name of the

you're alleging you're paying.

With so many troubling questions, government action becomes inevitable.

You had to be deaf, dumb, and blind not to see a raid coming.

Everybody knew it.

When you wave a red flag at a bull, you can't be surprised when he charges.

And that's what happened.

On May 12th, federal and state law enforcement agents swarm into Postville.

Enforcement agents surrounded the plant, blocked off all exits to the town of

Postville, and entered the plant to conduct the workforce operation, the

The morning's stillness is shattered as hundreds of agents under the direction

of Immigration and Customs Enforcement descend on agri -processors.

There was a lot of confusion taking place on the ground at the time. There

helicopter circling overhead.

You had police cruisers and squad cars come screeching into the parking lot.

It is the largest single -site immigration raid in U .S. history.

Workers were rounded up inside the plant. A number of them tried to hide,

agents spent the next several hours hunting through the plant, finding the

illegal immigrants.

processing them into buses.

On the day of the raid, more than two -thirds of the workers at AgriProcesses

are illegal and undocumented.

389 are arrested, placed in buses and hauled away.

Evidence suggests there is little doubt managers were aware of widespread labor

violations. In the raid, they found basically a cache of identifications all

made by the same machine.

false identifications in the human resources office of the company.

The raid is devastating for Shalom Rabashkin and agri -processors.

In a matter of three hours, what his father had built with his bare hands and

had operated for 20 years from nothing to a $300 million -a -year business was

destroyed.

The raid, arrests, and subsequent deportations cut Postville's population

more than 20%. The day of the raid was like a huge forest fire.

Fires that just raged and burned and scorched everything in sight.

After the raid, the fires died down, and the company tried to survive, but they

couldn't because they lost their workforce.

What happens next is a classic domino effect.

One thing fell after another after another. The city got in trouble. The

businesses got in trouble. The local suppliers got in trouble.

Agri ran out of cash.

They couldn't pay their vendors.

On October 23, 2008, First Bank finally calls in AgriProcessor's $35

million loan.

Once that loan was called, it all came crashing down.

AgriProcessor declares bankruptcy a week later, leaving millions of dollars

unaccounted for.

The bankruptcy is not the reason that the bank lost money.

The fraud is the reason the bank lost money.

When bankruptcy trustees try to collect outstanding receivables, they quickly

realize there is a serious problem.

Customs were telling us that, well, this invoice was paid already, or that's not

a real invoice, or I don't know what that is. I've already paid you.

We would call people who on the books owed $60 ,000, and they would say, we

$60 ,000.

And it turned out that money went to pay off on the books a fake invoice.

Investigators soon learned just how fast and loose AgriProcessors has been with

its financials. There were all of these different things going on with the hunt

payroll, with the immigration, with the fake invoices, the bills elating, the

inflating, you know, the numbers to the bank.

It was a multifaceted scheme.

At that point in time, we notified the U .S. attorney in the bank that we had

found the fraud.

Up next, investigators begin sifting through the rubble of agri -processors,

trying to make sense of Shalom Rabashkin's scheme.

We all began looking and trying to find the money.

It was dizzying to try and determine where money was going, why it was going

there, and how we could get it back.

Agri -processors is left reeling after the 2008 immigration raid exposes

systematic layers of financial fraud and employee abuse.

What prosecutors did was work their way up from the lowest level workers to the

mid -level managers, and then from the mid -level managers they use as leverage

to strike at the highest level managers, such as Shalom Rabashkin.

50 -year -old Shalom Rabashkin.

A CEO with no prior business experience has a lot to answer for in his running

of a failed $300 million company.

You like to think that if someone doesn't know what they're doing in that

company, they surround themselves with professionals who do.

That didn't happen here.

Shalom Rabashkin took it upon himself and made some very poor and some illegal

decisions.

In September, the Iowa Attorney General's Office charges Shalom

company owner Aaron Roboshkin with 9 ,311 labor violations involving 29

children under the age of 18.

We didn't allege that he personally hired any of these people. He supervised

HR department, and we felt that the evidence would support a clear inference

that he directed the hiring practices that occurred in the HR department.

Under Iowa code, the violations are considered misdemeanors. The penalties

cumulative on top of each other, so that if Shalom had been convicted of all 9

,311 counts, he would have faced over 760 years in prison.

Weeks later, Shalom Rabashkin is arrested and charged in federal court

conspiracy to harbor undocumented aliens and document fraud.

as well as overseeing a $26 million bank fraud.

All told, he's charged with 161 separate federal criminal counts, including

pocketing nearly $1 .5 million.

Among the government's allegations, $300 ,000 for credit card bills, $200 ,000

for remodeling, $76 ,000 for his state and federal income tax.

and even more for jewelry, mortgages, insurance, and car payments.

What was the real, true purpose of the money?

Prosecutors were saying he was using it for his own personal expenses.

What the defense lawyers countered was, okay, yes, sometimes that money was

borrowed, but the money was used for business expenses that happened to look

personal.

Shalom Roboshkin is convicted on November 12, 2009.

of 86 counts of bank fraud for his mishandling of the first bank business

capital loan.

Prosecutors asserted and the judge agreed that he was very much in control,

he actually was the mastermind of the whole thing and he was running the

corrupt operation.

Satisfied, prosecutors declined to pursue the 72 federal counts of labor

violations.

They dropped the immigration -related charges with the provision that we can

bring them again if we need to, meaning if somehow his other conviction would be

overturned or new evidence surfaced that led them to want to prosecute him

further for other reasons.

But advocates for the workers are bitterly disappointed.

The message to employers, again, is don't mess with the bank.

Do whatever you want to the workers.

Meanwhile, agri -processors plead guilty to state child labor violations, and

now Shalom Rabashkin himself faces similar charges.

What our evidence showed was that Shalom Rabashkin had the information that

kids were working in the plant, and he had the authority to do something about

it. The defense countered that the children who had applied had misled the

managers, and so as a result, you know, the managers couldn't have known.

In June 2010, an Iowa jury acquits Shalom Rabashkin on all counts of child

violations. He was completely exonerated of everything that he was charged with

in state court. But he is still guilty of the federal charges.

On June 22, 2010, Shalom Rabashkin is sentenced to 27 years in prison for his

role in AgriProcessor's financial fraud.

He's also ordered to pay $27 million in restitution.

Barring appeals, Rubashkin will be 75 years old when he's released in 2033.

No reasonable person looking at this case would conclude that a man who

more money than his father's business was entitled to borrow should receive a

life sentence.

Most of the murderers that I prosecuted got less time in prison than Shalom

Rubashkin is sentenced to right now.

80 -year -old Aaron Rubashkin, AgriProcessor's owner and sole

not convicted of any crimes.

Shalom Rubashkin serves his time in Otisville, New York.

Awaiting appeals, he leaves a legacy as tangled and confusing as the company he

once ran.

Did Shalom Rubashkin make mistakes?

You bet he did.

Was he in over his head?

Yes, he was.

Did he ever intend to rob, steal, or cheat anyone? No.

It was unnecessary.

It didn't have to happen.

It was something that was avoidable.

Here's the bottom line. You cannot afford not to know what's going on in

company, top to bottom. You are responsible.

You're the CEO. You're responsible.