Slaughterhouse worker testifies she faked records for Rubashkin
By GRANT SCHULTE • gschulte@dmreg.com • October 15, 2009


Sioux Falls, S.D. — An employee at an eastern Iowa slaughterhouse testified Wednesday that Sholom Rubashkin asked her to produce an "extremely large" number of fake sales records in May 2008, the same month federal immigration agents raided the plant.

Darlis Hendry told jurors that Rubashkin, a former top executive at Agriprocessors Inc., asked her to create as many as 20 invoices per day for sales that were never made.

Prosecutors allege that the invoices were part of a scheme to defraud the plant's bank out of $10 million and launder the money through a school and kosher grocery store.


"It was odd, but it wasn't for me to question him," Hendry said during Rubashkin's financial fraud trial.

"Why not?" Assistant U.S. Attorney C.J. Williams asked.

"Because he's the boss," Hendry replied.

Hendry's statements came on the second day of Rubashkin's trial on 93 fraud-related charges.

Defense lawyers have yet to cross-examine Hendry, who still works at the plant.

Prosecutors and defense lawyers painted different portraits of Rubashkin during their opening arguments in Sioux Falls.

Prosecutors said Rubashkin deliberately cheated the bank and falsified records. Defense lawyers cast the plant's troubles as a series of financial mistakes and criminal action by others.

Rubashkin pulled employees into the alleged plot and two top financial officers were paid roughly $150,000 — three times their salaries — for their cooperation, Williams said.

Rubashkin, who approved every check, persuaded the plant's St. Louis lender to pay advances on a $35 million credit line with made-up sales to show money that had not yet been received, Williams said.

Rubashkin was a top executive at the former Agriprocessors Inc. kosher meat plant, now Agri Star. Nearly 400 illegal immigrants were arrested in the immigration crackdown that pushed the plant into bankruptcy.

Defense lawyer Guy Cook said prosecutors distorted the activities of "a good man" and his family business.

Rubashkin was "a guy in over his head, a well-intentioned fellow, a man trying to keep his father's business afloat," Cook said. He described the plant as a "true American success story" that generated up to $300 million annually at its peak, but floundered because of Rubashkin's mistakes.

The plant operated on slim margins because of the high cost and technical requirements to produce kosher meat, Cook said.

He said others in the company, such as former controller Toby Bensasson, were responsible for the alleged financial crimes.

Bensasson pleaded guilty of conspiracy in August and has agreed to testify against Rubashkin.

Rubashkin "did his best," Cook said. "Maybe it wasn't good enough, but it was not a crime."

The bogus invoices were always for sales larger than $25,000, with rounded dollar figures, Hendry said.

Hendry said she produced invoices for Rubashkin for more than a year, starting in August 2007, but assumed they were for legitimate business deals until he began to request several each day.

Prosecutors have not charged her with any federal or state crimes.

Rubashkin, 49, also faces 72 charges related to the alleged plot to hire and harbor illegal immigrants from Guatemala, Mexico and elsewhere.

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