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Midamar founder charged in ‘Halal’ beef export scheme
12-01-2014
CEDAR RAPIDS — A 73-year-old Cedar Rapids businessman was indicted Thursday in federal court on 19 counts involving the sale of misbranded “Halal” beef products and falsifying export documents and certificates.
William B. Aossey, Jr., owner and founder of Midamar Corp. and registered agent of Islamic Services of America, both operated from 1105 60th Ave. SW, is charged with one count of conspiracy to make false statements, sell misbranded meat, and commit mail and wire fraud; seven counts of making or causing false statements to be made on export applications; seven counts of wire fraud; three counts of money laundering; and one count of conspiracy to commit money laundering.
His initial appearance and arraignment is set Oct. 30 in U.S. District Court.
According to the indictment, Midamar sells and distributes food products throughout the world and markets its products as meeting the strictest Halal beef slaughtering standards. Islamic Services of America certifies food products as Halal for customers throughout the world.
Malaysia and Indonesia restrict the import of Halal beef to products that had been certified by a specifically approved certifying entity, according to the indictment. Indonesia and Malaysia also restricted the import of Halal products since May 2008 to those products that have been slaughtered at a facility approved by each country. Islamic Services of America is one of the few organizations approved by Malaysia and Indonesia to certify Halal beef for import into those countries.
An exporter of these products is required to truthfully and accurately complete specific forms which account for all the products contained in the shipment and certify the products meet the import requirements of the importing country, according to the indictment.
According to the indictment, Aossey conspired and agreed with others known to the grand jury to commit violations of law within the jurisdiction of Department of Agriculture by covering up material facts by a scheme, make false and fraudulent statements, to make and use false documents, sell misbranded products and make false statements on export certificates.
Aossey and others are accused of generating a variety of fabricated certificates and writings, including export documents, that contained falsified information concerning the source and nature of the beef products, according to the indictment. The false certificates and writings were created to show the shipments complied with import requirements of the countries where the beef was shipped.
According to the indictment, customer orders were taken by Midamar for the sale and export of Halal beef products to customers in Malaysia and Indonesia. Midamar placed orders by phone or email with a slaughter and production facility in Windom, Minn., which wasn’t certified by the two countries for export. The Windom facility shipped beef products to Midamar to fulfill orders placed with the Windom facility by Midamar.
The beef slaughtered and produced by the Windom facility and shipped to Midamar was marked with a USDA establishment number and those labels were removed by Midamar employees and replaced with a Midamar USDA establishment number.
The indictment also includes specific payments wired to Midamar’s bank accounts for the transactions of the products and lists USDA export certificates. Each is “alleged to constitute a separate overt act.”
The indictment also contains two forfeiture allegations for proceeds and property involved in some of the offenses. The property includes a money judgment of $134,080.
Midamar released a statement over the weekend, stating the company was disappointed by the charges and the "heavy handed tactics" of the government during the course of the investigation. Company bank accounts were seized but later returned after discovering Midamar hadn't engaged in any criminal misconduct, which demonstrated the "malicious intent behind the baseless charges alleging deceptive practices, fraud and money laundering by Bill Aossey."
The directors and employees of the company have "grave concerns" that Aossey may be unfairly signaled out and targeted, according to the company’s release. The actions detailed in the indictment refer to "regulatory infractions committed without any intent to deceive or profit." Midamar took actions to correct the violations to the satisfaction of USDA officials in the summer of 2011.
"Such actions are common in a heavily regulated industry," according to the release. "In fact, Midamar stands proud in its industry as having very few regulatory infractions."
If Aossey is convicted on all counts, the conspiracy charge is punishable by up to five years in prison, each count of making a false statement on an export application is punishable by up to three years in prison, each count of wire fraud is punishable by up to 20 years in prison and each count of money laundering, including the money laundering conspiracy, is punishable by up to 20 years in prison.
Aossey also would face a fine up to $250,000 that could be imposed on each count, along with a term of supervised release.
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