CEDAR RAPIDS, Iowa — A food supplier for several years falsely marketed beef to Muslims around the world as meeting strict halal standards, exporting products that weren't slaughtered in accordance with Islamic law, federal prosecutors allege in a major fraud indictment.
Midamar Corp., based in Cedar Rapids, Iowa, 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, according to the indictment returned Dec. 5 by a grand jury.
Midamar and its directors, brothers Jalel and William "Yahya" 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 controlled, Islamic Services of America, which is 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.
Midamar's founder, 73-year-old William Aossey Jr., pleaded not guilty to similar charges last week. His sons, ages 40 and 44, were scheduled to be arraigned Monday in federal court in Cedar Rapids.
Midamar issued a statement calling the charges a violation of the U.S. constitution's separation of church and state, saying it was inappropriate for the government to judge halal practices. The company said its slaughter methods have been vetted by halal auditors during its 40-year history and the "company continues to maintain its high level of halal integrity."
"The allegations of halal fraud are due to a 'one size fits all' approach taken by the government authorities," the statement said.
Islamic Services of America said Monday that it won't allow "allegations, implications or inferences of any improprieties to affect its level of quality and service." The companies, which are based at the same location and collectively have about 80 employees, thanked customers for their support.
The indictment alleges Midamar, a pioneer in halal food in the United States, and Islamic Services of America repeatedly gave the false impression that beef products complied with import and United States Department of Agriculture requirements. The company said the case stems from a regulatory action brought in 2010 by USDA inspectors that it thought had been resolved.
Midamar and Islamic Services of America told customers all of its cattle were slaughtered by hand by specially-trained Muslim slaughtermen who always recited prayer. Midamar also said 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.
In reality, Midamar's primary beef supplier from 2007 to 2010 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 did not pray or recite the "Tasmia" prayer, the indictment says.
After the orders arrived at Midamar 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 that were presented to and approved by the USDA.
Syed Rasheeduddin Ahmed, president of the Muslim Consumer Group for Food Products, said many Muslims are already suspicious 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?"