The former Operations Manager of Midamar Corporation (Midamar) of Cedar Rapids, Iowa, a worldwide distributor of Halal food products, was sentenced yesterday to serve a three year term of probation.

Philip G. Payne, 50, of Ryan, Iowa, received the sentence after having pleaded guilty on January 5, 2015, to one count of conspiracy to make and deliver false certificates and writings.

According to facts admitted by Payne in a plea agreement, between about April 2007 and December 2009, Midamar employees, knowingly and without authorization, removed USDA marks of inspection from meat products and replaced them with marks of inspection from a facility other than where the meat was slaughtered.This was done at the direction, and with the knowledge and approval, of Midamar’s owners and managers.These and other actions were taken with the intent to make the beef eligible for import into countries that would otherwise not have accepted the beef shipments.

Payne, also admitted as part of his plea agreement that, as demand for Halal beef supplied by Midamar grew, Midamar supplemented its sales of purported Halal beef with Kosher beef slaughtered by rabbis, without any participation or oversight by a Muslim slaughterman, contrary to representations made by Midamar and Islamic Services of America (ISA), an internationally recognized Halal certifier.

Midamar and ISA were founded by William B. Aossey, Jr., of Cedar Rapids, Iowa, and in recent years were owned and operated by his sons, Jalel Aossey and Yahya (Bill) Nasser Aossey.  William B. Aossey, Jr., was convicted in July of this year by a federal jury on related charges.  He is currently incarcerated while awaiting sentencing.  Jalel and Yahya Aossey, as well as Midamar and ISA, have each pleaded guilty to related charges and are also awaiting sentencing.

The investigation of Midamar, ISA, Payne, and the Aosseys was initiated in early 2010 when the USDA was informed that misbranded meat shipped by Midamar had been discovered in a warehouse in Indonesia.  A preliminary investigation by the USDA showed at least 22 shipments of misbranded meat had been sent to Malaysia and Indonesia between about 2007 and 2010.  As part of a follow-up investigation, Payne informed investigators that Midamar and ISA had been involved in additional fraud related to the substitution of Kosher meat products to satisfy Halal beef orders.  Further investigation of that scheme led to the indictment of the Aosseys, Midamar, and ISA.

In addition to the three year term of probation, Payne was ordered to pay a fine of $20,000.  Payne is also currently serving an eighteen month term of supervision as part of an agreement to defer prosecution on two additional felony fraud counts contained in an Information filed against him in federal court earlier this year.  Payne is required to perform 75 hours of community service as part of the deferred prosecution agreement.  If Payne successfully completes the term of deferred prosecution, the two additional fraud counts will be dismissed.

The case was prosecuted by Assistant United States Attorneys Richard L. Murphy and Timothy Vavricek, and was investigated by the Department of Agriculture Office of Inspector General Office of Investigations, and by the Internal Revenue Service Criminal Investigations.

Court file information is available at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.  The case file number is 14-CR-00143-LRR.

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