SIOUX FALLS, S.D. (AP) -- The man who replaced an Iowa kosher slaughterhouse manager accused of financial fraud testified Wednesday that his predecessor told him he intentionally diverted money meant to pay off a bank loan back into the plant's operating budget.

Bernard Feldman replaced Sholom Rubashkin at the Agriprocessors Inc., plant in Postville, Iowa. Feldman testified that Rubashkin told him that he needed the money at the plant after an immigration raid in May 2008, when 389 illegal immigrants were arrested.

Feldman said he asked Rubashkin directly about customer payments that were supposed to go to the plant's lender. He said Rubashkin told him, "We needed the money to pay operating costs."

Rubashkin faces 91 financial fraud charges, including bank fraud, mail and wire fraud and money laundering. He has pleaded not guilty.

Prosecutors claim the company intentionally defrauded St. Louis-based First Bank on a revolving $35 million loan by faking invoices from meat dealers.

Rubashkin faces another trial on 72 immigration charges when the current trial concludes.

Rubashkin's father owned the Agriprocessors plant, but prosecutors have said Rubashkin was in charge of the plant's day-to-day operations, an allegation the defense disputes. The plant has since been sold.

Feldman was the third person called to testify who worked at the plant after the immigration raid. He echoed the theme of previous witnesses: The plant was in disarray, operating on a shoestring budget with sloppy accounting.

Defense attorney Guy Cook questioned whether Feldman would have taken the job as Rubashkin's replacement if he believed the family to be corrupt.

"Absolutely not," Feldman said. "I can only tell you that, putting this incident aside, in many years with Sholom, I have never found him to be untruthful or devious in any manner."

A second witness, former Agriprocessors plant controller Toby Bensasson, testified that he and Rubashkin approved the fake invoices. Bensasson pleaded guilty in August to making false statements to a bank in connection with his work at Agriprocessors.

Bensasson said Rubashkin expressly forbid any plant employee from speaking with First Bank until they cleared it with Bensasson or accountant Mitch Meltzer.


Information from: The Des Moines Register,

Copyright 2009 The AP.

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