Inside the Rubashkin Appeal

Simcha Dunn – Five Towns Jewish Times

On Wednesday afternoon, while Sholom Rubashkin remained imprisoned in the Otisville Federal Correctional Institute in New York, convicted of various counts of financial fraud and sentenced to 27 years’ imprisonment, a three-judge panel of the U.S. Court of Appeals for the Eighth Circuit heard arguments on his appeal in a federal courtroom about a thousand miles away, in St. Louis, Missouri. Rubashkin was represented by Nathan Lewin, who argued on his behalf. For Rubashkin, this appeal presents his last real chance of having that conviction vacated or the sentence reduced.

Background
As most readers of this paper know, Agriprocessors, Inc., was a family-owned kosher slaughtering and meat production company. The company’s main facility was in Postville, Iowa. On May 12, 2008, the U.S. Immigration and Customs Enforcement agency raided the Postville plant. Following the raid, on October 30, 2008, Sholom Rubashkin was arrested and charged with various immigration-related offenses. On November 14, Rubashkin was arrested again and the indictment amended to reflect new bank-fraud charges alleging that he had inflated the value of the company’s collateral in order to secure a bank loan and that he had falsely certified to the bank that the company was complying with all laws even though the company was employing undocumented aliens.

Thereafter, the indictment was superseded five more times, the final one including 72 alien-harboring, document-fraud, and conspiracy counts, 14 counts of bank fraud, 24 counts of making false statements to a bank, 14 counts of wire fraud, 9 counts of mail fraud, 10 counts of money laundering, and 20 counts of willfully violating an order of the Secretary of Agriculture, relating to the payment of cattle suppliers. In total, there were 91 counts relating to financial charges and 72 immigration-related charges.

Rubashkin had sought to be released on bail pending trial, but was held without bail, after the government argued, among other things, that Rubashkin should not be released as, given that he was Jewish, there was a risk that he would flee to Israel and could not be extradited given Israel’s “Law of Return.” Rubashkin appealed that decision, and the decision was ultimately reversed and Rubashkin released on bail.

The case was presided over by United States District Judge Linda Reade. On June 25, 2009, Judge Reade severed the immigration charges from the financial charges, concluding that trying the counts together “would prevent a jury from making a reliable judgment on the guilt or innocence” of Rubashkin. However, the judge granted the government’s request that the financial counts be heard first. In addition, the judge ordered that the trial be moved to Sioux Falls, South Dakota, because “negative pretrial publicity had caused the vast majority of potential jurors to develop and maintain a pervasive, strong bias” against Rubashkin.

Rubashkin was tried before a jury between October 13 and November 12, 2009. Over the strenuous objection of the defense, the government was permitted to present almost three days of evidence relating to immigration-related charges, in support of its claim that Rubashkin had committed fraud when he falsely certified to the bank that he was complying with all laws. Ultimately, Rubashkin was convicted of 86 of the 91 counts, being acquitted on five counts relating to the willful violation of an order of the Secretary of Agriculture.

Sentencing took place on April 28–29, 2010. Numerous witnesses testified on Rubashkin’s behalf and hundreds of letters were sent to the court in his support. Initially, the government recommended life imprisonment, but changed its recommendation to 25 years after various former high-ranking federal prosecutors and Department of Justice officials called such a recommendation unfair and unreasonable. Ultimately, the judge ordered Rubashkin to be sentenced to 27 years’ imprisonment.

On August 5, 2010, Rubashkin filed a motion for a new trial. The motion was based on his claim that he had newly discovered evidence, which showed that Judge Reade had privately met and communicated with Immigration and Customs Enforcement officials and the United States Attorney’s Office for at least six months prior to the May 2008 raid. That evidence consisted primarily of ICE memoranda and e-mails detailing meetings between the judge, ICE, and the U.S. Attorney’s Office, wherein the judge asked for briefings on how the operation was to be conducted and indicated that she was “willing to support the operation in any way possible, including staffing and scheduling.” One e-mail even called her a “stakeholder” in the raid. Rubashkin had never been informed of any of these meetings. On October 27, 2010, Judge Reade denied the motion for a new trial.

The Appeals Court

The Eighth Circuit Court of Appeals is responsible for hearing federal appeals that arise in the United States District Courts in Arkansas, Iowa, Minnesota, Missouri, Nebraska, North Dakota, and South Dakota. The Eighth Circuit is considered the most Republican appeals court in the nation; nine of its eleven judges were appointed by Republican presidents. It is the only federal appellate court where the majority of the judges have been appointed by a single president—George W. Bush.

Rubashkin’s appeal was heard by Judge William S. Riley, a 57-year-old native of Nebraska and George W. Bush appointee; Diana Murphy, a 77-year-old native of Minnesota and Bill Clinton appointee; and Lavenski Smith, a 53-year-old Arkansas native and George W. Bush appointee. Given the conservative nature of the court, the panel was regarded as a moderate one. Ironically, in the morning, Judge Reade sat on a panel with Judges Murphy and Smith. And while, given the volume of appeals and the limited number of appellate judges, it is not unusual for a district judge such as Reade to sit on a Court of Appeals panel, Judge Reade has not sat on such a panel since 2007.

The Issues

In his brief on appeal, Rubashkin primarily raises four issues.

First, he argues that he is entitled to a new trial, before a different judge, as Judge Reade should have been disqualified from presiding at his trial because of her undisclosed meetings and off-the-record discussions with the prosecutors. The government argues that the judge was merely involved in planning court operations limited to matters of court logistics. The government further argues that Rubashkin was aware of the court’s involvement in planning court operations through various sources of information, yet failed to file a motion seeking the judge’s recusal from the case. Finally, the government invokes the doctrine of “harmless error,” claiming that even if the judge had acted improperly, the evidence to convict Rubashkin was in any event overwhelming.

Second, Rubashkin argues that he is entitled to a new trial because the court improperly admitted evidence of harboring of aliens in his bank-fraud trial. Indeed, the judge had specifically severed the immigration-related violations because she felt that it would unfairly influence the jury, yet in the ten-day trial she permitted almost three days’ worth of testimony relating to allegations of violations of immigration law. The government argues that the court properly admitted evidence of alien harboring because Rubashkin was on trial for making false statements to the bank concerning his compliance with the law, which included compliance with immigration law.

Third, in a technically based argument, Rubashkin argues that his money-laundering counts should be vacated, because the monies at issue, monies from customers that were placed into various bank accounts for the purpose of giving the appearance that the accounts receivables were higher than they were, were not, as required by law to sustain a money-laundering charge, the “proceeds” or profits of illegal activity. The government argues, however, that under the circumstances present here, these funds should be considered “proceeds,” because they allowed Rubashkin to ultimately effect his “fraudulent” scheme.

Finally, Rubashkin argues that his sentence is “outrageously severe” and that the court failed to consider his motive, which was not greed, his stellar history of good deeds and contributions to the community, the need for his presence at home to care for his autistic son, and the fact that when compared with other federal sentences for individuals convicted of similar offenses, there is an “enormous disparity between the sentence imposed on Rubashkin and sentences imposed on other nonviolent white-collar criminals.” Indeed, last week, in FDIC v. Goberdhan, a Long Island attorney was sentenced to five years in prison for taking part in a massive mortgage fraud scheme that cheated banks out of $23 million.

Finally, Rubashkin also argued that the judge incorrectly calculated the loss caused by his actions. The government argues that the judge did not abuse her discretion in that Rubashkin “committed a broad array of serious financial crimes resulting in over 26 million dollars in losses, committed additional crimes not accounted for, obstructed justice by perjuring himself and destroying evidence, enriched himself at the expense of his victims, and demonstrated a lack of remorse for his crimes.”

The Arguments In The Courtroom

In the courthouse on Wednesday, Mr. Lewin argued Mr. Rubashkin’s case to the three-judge panel. Emotions were high as Lewin stepped up to the podium. The courtroom was filled with supporters of Rubashkin. In attendance were members of the Rubashkin family, including Rubashkin’s brothers Yossi and Heshy and his daugthers Rosa Hindi and Mushka, all of whom took time to thank those in the courtroom. Members of the Satmar community from Monroe and the St Louis community were present in significant numbers as well. Tehillim was recited throughout the oral argument, which lasted for about 75 minutes.

Lewin was allotted 30 minutes for argument and began by stating that he would focus exclusively on the issue of the failure of the trial judge to recuse herself and inform Rubashkin’s counsel of meetings between her, the prosecutor, and ICE officials. Lewin pointed out that the judge had met 12 times with the government prior to the raid on Agriprocessors, had indicated that she was willing to support the operation in any way possible, and had asked for a final game plan. Lewin argued that at the very least the judge should have transcribed these meetings.

The judges, however, appeared skeptical, at least initially, of the argument, and for the next 25 minutes peppered Lewin with questions on this issue. For example, Chief Judge Riley wanted to know what evidence there was of prejudice. And didn’t Lewin know that judges often meet with the government on matters and that transcripts were not kept? And finally, didn’t it just appear that the judge was working with the government on logistics, given that the raid would result in over 700 arrests?

Lewin responded by stating that his client did not have to show prejudice, but that the applicable standard was whether the ordinary person would question whether justice was being done. He further argued that while it certainly appeared that the judge had stepped into the shoes of a prosecutor, only a transcript would reveal precisely what was said at the meetings.

It was only in the last five minutes of his argument that Lewin was able to address the excessive nature of the sentence. In the main, he argued that the judge had failed to consider Rubashkin’s motive and his stellar history of good deeds and that his sentence essentially amounted to life imprisonment and was disproportionate with the conduct for which he was convicted. By this time, Lewin’s time had run and he was given the opportunity to make a brief rebuttal after the government was heard.

Peter Deegan, Assistant United States Attorney from the Northern District of Iowa, then argued on behalf of the government. He argued that counsel for Rubashkin had been aware of at least one meeting between the judge and the government and had actually been given the opportunity to file a motion for recusal before trial, but had failed to do so.

Chief Judge Riley countered that the issue appeared to be the degree of knowledge that counsel had at that time before trial, and that one meeting was certainly different from twelve. Judge Murphy then stated that if this was all just a matter of logistics, then why could the government not have just dealt with an administrative clerk?

Following this discussion, Chief Judge Riley then asked Deegan to address the claim that the sentence was excessive. In making this request, Riley stated that the sentence did seem rather high, given that Rubashkin was convicted of a white-collar crime and not a violent crime.

Deegan responded that the sentence was a lot, but that it was consistent with the sentencing guidelines and, because of Rubashkin’s conduct, was well deserved. Deegan claimed that Rubashkin was heavily and actively involved in the bank fraud, had obstructed justice by lying and destroying documents, and had also committed additional crimes which could permissibly be considered in his sentence.

Lewin was then given five minutes for rebuttal. He used that time to again assert that the trial had been unfair because, at least psychologically, the trial judge had essentially been part of the prosecution team. He then went on to say that Rubashkin’s sentence was unjust because Rubashkin was a kind, sensitive man, who had given significant and constant service to the community and of whom no one, not even the government witnesses, had a bad opinion. Lewin concluded by informing the court that in the near future, he would move for bail for his client.

The proceedings ended with the judges thanking Lewin and Deegan for their presentations. The judges did not rule on the appeal, but reserved their decision. The courtroom slowly emptied out, and a Minchah minyan was held in a small room adjacent to the courtroom. Lewin was the shaliach tzibbur.

To hear audio of the appeal, click here
(Click on number 11)