For the first time since the law was passed, criminal charges were brought against someone for violation of the 1921 Packers and Stockyards Act, section 409. Federal prosecutors charged Sholom Rubashkin with the crime of failing to pay cattle suppliers within 24 hours. Not with failing to pay – with failing to pay within 24 hours.
In a detailed sentencing memorandum, the prosecution pointed to 31 cattle suppliers who were not paid within 24 hours. They claimed this delay represented a loss – specifically, on page 25 of the sentencing memo, prosecutors asserted, the actual loss to each Packer’s Act victim is attributable to the fact that they all lost the time value of their money while they were waiting for payment.
As an example, the government sentencing memo declared, Waverly Sales, Inc. has quantified the amount of their actual loss to be $3,800.51. This is based upon the amount of interest Waverly paid on a mortgage loan it took out on its property in order to cover the cost of the cattle sold to Agriprocessors while it was waiting for payment through the Packer’s trust.
Sholom Rubashkin was ultimately sentenced to 4 years in prison because his supplier lost interest waiting for full payment, which was actually made, but made days late. The latest payment was 11 days late.