Banking and Finance Sector

Extracted from the 11/18/2008 DHS Daily Open Source Infrastructure Report (Website)

11. November 15, Associated Press (Iowa) Former CEO of Iowa kosher slaughterhouse arrested. A former executive of a kosher slaughterhouse that was the site of one of the nation's largest immigration raids was arrested Friday on a bank fraud charge and ordered jailed until at least next week. The man was arrested at his home in Postville, Iowa, and driven to Cedar Rapids for his appearance in U.S. District Court. The arrest Friday was related to the depositing of checks from customers and the alleged diversion of money. Court records said that under a loan agreement with St. Louis-based First Bank, the man was supposed to deposit customer payments into an account at Decorah Bank & Trust as collateral on a loan. Records show that he instead diverted millions of dollars in customer payments into an Agriprocessors account at a different bank. The payments would then not be posted on the customers' Agriprocessors accounts until later. That resulted in the inflation of the value of accounts receivable in Agriprocessors' books, allowing the company to borrow additional funds from the bank without proper collateral. He also is accused of telling an Agriprocessors employee to erase evidence of the scheme from company computers. Two weeks ago, Agriprocessors filed for bankruptcy protection as it faced allegations of making inaccurate and misleading statements to First Bank. The slaughterhouse owes First Bank at least $33 million.
Source