Prison Term and Nearly $1 Million in Judgments Ordered Against Midamar Founder, Midamar, and ISA
William B. Aossey, Jr., age 74, of Cedar Rapids, Iowa, the founder of Midamar Corporation (Midamar) and ISA, Inc. (d/b/a Islamic Services of America, Inc.), who was convicted in July of last year of 15 counts of conspiracy, making false statements on export certificates, and wire fraud, was sentenced today to serve two years in federal prison. The corporate entities founded by Aossey were also sentenced.
A 19-count Indictment was filed against Aossey on October 23, 2014. Aossey was released on pretrial supervision subject to special conditions pending trial. A federal jury convicted Aossey on 15 of the 19 counts on July 13, 2015. He was acquitted on four counts alleging money laundering and conspiracy to commit money laundering. After the jury returned its verdict, the Court held a detention hearing and ordered Aossey held without bond pending further court order.
On July 22, 2015, the Court ordered Aossey detained pending sentencing and in its written Order found that Aossey “must remain detained pending sentencing because he has not established by clear and convincing evidence that he is not likely to flee if released under suitable conditions.” The Order also noted that Aossey had not earned the trust of the Court since he had violated the terms of his pretrial release by failing to notify his probation officer of contact with law enforcement. This failure related to local, state and federal law enforcement raiding his business while investigating illegal firearm shipments to Lebanon.
Evidence at trial showed that foreign governments imposed strict requirements on the import of religiously slaughtered halal beef. In addition to prescribing the approved methods of slaughter, the governments of Indonesia and Malaysia restricted halal beef imports to those products that originated from slaughter facilities specifically inspected and approved by each country. Midamar, a halal food distribution company, directed its employees to change markings on packages of beef product originating from an unapproved slaughter facility to make it appear as if the products originated from an approved slaughter facility.
As part of the scheme to ship misbranded meat products, USDA export documents were falsified and fake health certificates were generated by Midamar and ISA employees USDA, Food Safety and Inspection Service (FSIS) letterhead. ISA was responsible for certifying that the product originated from an approved facility, among other things. As a result of the fraud committed by Aossey, Midamar, and ISA, 22 shipments of beef products not otherwise eligible for import into Malaysia and Indonesia were accepted into commerce in those countries, contrary to the regulations of those countries. The scheme continued for about two and a half years.
Midamar and ISA each previously pleaded guilty to one count of conspiracy to: commit mail and wire fraud; cover up material facts by a scheme; make and use false statements and documents in a matter within the jurisdiction of the U.S. Department of Agriculture; make false statements on export certificates with the intent to defraud; and, sell misbranded meat in interstate commerce with the intent to defraud. The scheme to which Midamar and ISA pleaded included the acts charged against Aossey as well as numerous other fraudulent acts and practices concerning the sale and certification of halal beef around the world over about a five year period.
Aossey was sentenced in Cedar Rapids by United States District Court Chief Judge Linda R. Reade. He was sentenced to 24 months’ imprisonment and fined $60,000. Aossey was also ordered to forfeit $184,983 representing proceeds of the fraud. In addition, he was ordered to pay costs of prosecution of $16,824 and a special assessment of $1500. Aossey will be required to serve a three-year term of supervised release after the prison term. There is no parole in the federal system.
At the sentencing hearing, the court found Aossey repeatedly perjured himself at his trial and thereby sought to obstruct justice. The court also found the scheme was sophisticated. However the court varied down from a guideline sentencing range of 87-108 months, citing Aossey’s advanced age and lack of criminal history.
Midamar was fined $20,000 and ordered to forfeit $600,000. Midamar was also placed on probation for five years. As a special condition of probation, Midamar will be require to abide by all terms of a consent decree entered into with the USDA Food Safety Inspection Service. The consent decree requires Midamar to take a variety of corrective actions and to remove certain corporate officials including Jalel Aossey and William B. Aossey from the business. Midamar was also ordered to pay a special assessment of $400.
ISA was fined $60,000 and ordered to pay special assessment of $400. ISA was also ordered to forfeit $600,000. The forfeiture judgment was ordered joint and several with Midamar. ISA must also abide by a 5 year term of probation.
United States Attorney Kevin W. Techau stated following sentencing, “These are serious offenses that were not an aberration—something that occurred once or twice. This defendant’s conduct was orchestrated, coordinated and planned. Most importantly, the conduct was driven by greed.” Techau went on to note, “Mr. Aossey directed his employees to change labels and falsify accompanying records to get beef products into foreign countries contrary to the import restrictions of those countries. By doing this, he placed his profit motive above the interests of foreign consumers of halal beef who wrongly believed the products they purchased and consumed had originated from slaughter facilities that met the strict religious slaughter requirements imposed, and specifically approved, by the regulatory agencies in each country.”
“IRS Criminal Investigation is committed to unraveling complex financial transactions and schemes of this nature to assist our law enforcement partners,” said Karl Stiften, Special Agent in Charge of IRS Criminal Investigation. “The proceeds of illegal activity are used as fuel to continue their criminal conduct.”
Aossey is being held in the United States Marshal’s custody until he can be transported to a federal prison.
Aossey’s sons Jalel, age 41, and Yahya, age 46, also both from Cedar Rapids, have also been convicted in connection with same scheme as Midamar and ISA. Their sentencing date is March 11, 2016.
The case was prosecuted by Assistant United States Attorney Richard L. Murphy and Timothy L. Vavricek and investigated by the United States Department of Agriculture Office of Inspector General Investigations and Internal Revenue Service Criminal Investigations.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file numbers: 14-CR-00116-LRR (William B. Aossey, Jr.); 14-CR-00138-LRR (Midamar & ISA).
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