Former Agriprocessors CEO arrested again, charged with multi-million dollar bank fraud Page 1 of 2

U.S. Immigration and Customs Enforcement

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November 14, 2008

Former Agriprocessors CEO arrested again, charged with multi- million dollar bank fraud

CEDAR RAPIDS, - The former chief executive officer (CEO) of Agriprocessors Inc., in Postville, Iowa, was arrested by federal agents Friday and charged with bank fraud. The arrest was announced by U.S. Attorney Matt M. Dummermuth, Northern District of Iowa.

Sholom Rubashkin, 49, was arrested at about 8 a.m. Friday at his home in Postville by U.S. Immigration and Customs Enforcement (ICE) agents and U.S. Marshals on a charge of bank fraud. Rubashkin made an initial appearance at 11 a.m. in U.S. District Court in Cedar Rapids and was ordered held by Magistrate Judge Jon Scoles until a detention hearing Wednesday.

Rubashkin was arrested just two weeks ago on Oct. 30, and then charged with conspiracy to harbor illegal aliens for profit, aiding and abetting document fraud, and aiding and abetting aggravated .

The new complaint alleges that Rubashkin, the former CEO of Agriprocessors Inc., carried out a scheme to defraud a bank using Agriprocessors' $35 million line of credit by allegedly diverting 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 they were supposed to be sent directly to a depository account for the lending bank. 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 the company 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 collateral.

The complaint also alleges that Rubashkin instructed an Agriprocessors employee to delete evidence of the scheme from company computers the day after he bonded out on the original harboring, document fraud, and identity theft charges. If convicted on the bank fraud charge, Rubashkin faces a maximum

AILA InfoNet Doc. No. 08111771. (Posted 11/17/08) http://www.ice.gov/pi/nr/0811/081114cedarrapids.htm 11/17/2008 Former Agriprocessors CEO arrested again, charged with multi-million dollar bank fraud Page 2 of 2

AILA InfoNet Doc. No. 08111771. (Posted 11/17/08) http://www.ice.gov/pi/nr/0811/081114cedarrapids.htm 11/17/2008