CEDAR RAPIDS, Iowa – Sholom Rubashkin, 49, from Postville, Iowa, was arrested today at his home in Postville by U.S. Immigration and Customs Enforcement (ICE) agents and Deputy U.S. Marshals on a charge of bank fraud, U.S. Attorney Matt M. Dummermuth announced.  The charge is contained in a complaint filed today in U.S. District Court in Cedar Rapids. 

        On Oct. 30, 2008, Rubashkin was arrested on a federal complaint charging him with conspiracy to harbor undocumented aliens for profit; aiding and abetting document fraud; and aiding and abetting aggravated identity theft.  His case was bound over for consideration by a grand jury, and he was released on conditions that he wear a GPS ankle bracelet; limit his travel to the Northern District of Iowa; surrender his passport and his wife’s passport; and provide a $1 million appearance bond with $500,000 to be secured.  A federal grand jury indicted Rubashkin yesterday on those charges.  Also named in the indictment was Karina Freund, who was charged with one count of harboring undocumented aliens for profit.

        The new complaint alleges Rubashkin, the former CEO of Agriprocessors, Incorporated in Postville, executed a scheme to defraud a bank on Agriprocessors’ $35,000,000 line of credit.  Rubashkin allegedly diverted millions of dollars in customer payments on Agriprocessors’ accounts receivable.  According to the complaint, the customer payments were part of the bank’s collateral on the line of credit and were supposed to be sent directly to a depository account for the lending bank.  Allegedly, at the direction of Rubashkin, the diverted customer payments were not posted to the customers’ accounts in Agriprocessors' accounting system until a later date.  The complaint alleges that, as a result, the value of the accounts receivable appeared inflated on Agriprocessors’ books, and, because the amount Agriprocessors was allowed to borrow was tied directly to the value of its accounts receivable, the scheme gave Agriprocessors the ability to borrow additional funds from the bank without proper collateralization. 

        The complaint also alleges that Rubashkin instructed an Agriprocessors employee to delete evidence of the scheme from Agriprocessors’ computers.  The instructions allegedly came the day after Rubashkin bonded out on the original harboring, document fraud and identity theft charges.

        Rubashkin was arrested this morning without incident and is scheduled to appear today in federal court in Cedar Rapids.

        If convicted on the bank fraud charge, Rubashkin faces a possible maximum sentence of 30 years’ imprisonment, a fine of the greater of $1,000,000 or twice the loss caused, a $100 special assessment and five years of supervised release following any imprisonment.  Rubashkin faces a possible maximum penalty on the harboring charge of 10 years’ imprisonment, a $250,000 fine, a $100 special assessment and three years of supervised release following any imprisonment.  On the document fraud charge, he faces 10 years’ imprisonment, a $250,000 fine, a $100 special assessment and three years of supervised release following any imprisonment.  On the aggravated identity theft charge, he faces a mandatory consecutive two years’ imprisonment, a $250,000 fine, a $100 special assessment and one year of supervised release following any imprisonment.

        As with any criminal case, a charge is merely an accusation and a defendant is presumed innocent until and unless proven guilty.

        The case is being prosecuted by Assistant U.S. Attorneys Peter Deegan, C.J. Williams and Matthew Cole and was investigated by ICE and the FBI.