A food supplier falsely marketed beef to Muslims around the world for years as meeting strict halal standards, exporting products that weren't slaughtered in accordance with Islamic law, federal prosecutors allege in a lengthy fraud indictment.
Midamar Corp., based in Iowa, denies the allegations that it sold at least $4.9 million in beef to customers in Malaysia, Kuwait, United Arab Emirates and elsewhere that did not follow the halal practices promised in its labeling and advertising.
Midamar and its directors, brothers Jalel and Yahya "Bill" Aossey, are charged with conspiring to make and use false statements and documents, sell misbranded meat and commit mail and wire fraud. Also indicted is another company the brothers operate, Islamic Services of America — one of the few organizations approved by Malaysia, Indonesia, Kuwait, Saudi Arabia and UAE to certify beef for import into their countries. The defendants are charged with 91 other counts of making false statements on export certificates, wire fraud and money laundering.
The brothers, ages 40 and 44, entered not guilty pleas to the charges and were released following an arraignment Monday at the federal courthouse in Cedar Rapids. Their father, Midamar founder William Aossey Jr., 73, pleaded not guilty to similar charges last week and watched Monday's hearing with a company banker.
Attorney Michael Lahammer, who entered not guilty pleas on behalf of the corporations, said Midamar stands by its "stellar record" of delivering and exporting quality products for 40 years and would contest the charges.
He said the company believed it had fixed labeling infractions uncovered by inspectors in 2010, and would challenge the allegations of halal fraud on the grounds that they violate the U.S. constitution's separation of church and state.
"The government has no right to regulate what is a religious matter," he said.
Midamar, which remains in business, said in a statement that its slaughter methods have been vetted by halal auditors for decades.
"The allegations of halal fraud are due to a 'one size fits all' approach taken by the government authorities," the company said.
Islamic Services of America said that it won't allow "allegations, implications or inferences of any improprieties" to affect its operations. The companies are based at the same location and collectively have about 80 employees.
The indictment alleges the companies repeatedly gave the false impression that beef products complied with import and United States Department of Agriculture requirements.
Midamar and Islamic Services of America told customers its cattle were slaughtered by hand by specially-trained Muslim slaughtermen who always recited prayer, the indictment alleges. Midamar also advertised that it did not use penetrative captive bolt stunning, a process commonly used in meatpacking in which an animal is killed when a steel rod is shot into its brain.
But Midamar's primary beef supplier was a Windom, Minnesota, meatpacking plant that used bolt stunning to ensure all cattle slaughtered "were rendered senseless and were dead," the indictment alleges. The plant, which wasn't certified for export to Indonesia and Malaysia, often did not have Muslim slaughtermen present and didn't recite the "Tasmia" prayer, the indictment says.
After the orders arrived in Cedar Rapids, employees removed federally-required labels showing the beef came from that plant with acetone or nail polish remover, the indictment says. Employees allegedly then put on fraudulent labels indicating the meat came from an Omaha plant that was certified to export to Malaysia and Indonesia. Midamar allegedly included the false representations about the source on export forms and certificates presented to and approved by the U.S. Department of Agriculture.
Syed Rasheeduddin Ahmed, president of the Muslim Consumer Group for Food Products, said many Muslims are apprehensive about meat products that claim to meet halal standards.
"This indictment will add to their suspicion," he said. "Where can we buy? Which one is halal?"