A manager who was fired from a halal beef supplier charged with deceiving Muslim customers has been cooperating with prosecutors under a plea deal that may keep him out of prison, court records show.
Phil Payne, former operations manager at Midamar Corp. in Cedar Rapids, admitted he was part of a scheme to export beef to Indonesia and Malaysia that did not meet those countries' requirements, according to a plea agreement filed Tuesday.
Payne pleaded guilty Monday to conspiracy to make and deliver false certificates and writings, marking the first conviction in the federal government's lengthy investigation of Midamar. Two other charges will be deferred under a pretrial diversion agreement with Payne, 50, of Ryan.
Midamar founder William Aossey Jr. and two sons who now run the company have pleaded not guilty to charges related to exporting and marketing practices. Midamar and its halal certification organization, Islamic Services of America, also have pleaded not guilty.
Prosecutors say the companies conspired to mislead U.S. regulators, foreign officials and customers about the source and nature of Midamar's beef products and the level of adherence to halal standards of Islamic slaughter.
Midamar has defended its practices and accused the government of improperly trying to regulate halal standards that should be left to religion.
"Midamar's halal processes are vetted and approved by scholars and industry leaders the world over," spokeswoman Sara Sayed said when asked about Payne's plea. "We will continue to defend the integrity of the company."
According to the plea agreement signed in June, Payne agreed to "fully and completely cooperate" with the U.S. Attorney's Office. He promised to testify before a grand jury, provide relevant documents, be available for interviews and debriefing sessions and record conversations as directed.
Payne was fired in March 2012 after telling Midamar president Jalel Aossey that he intended to seek employment elsewhere, the document says. He has since gone to work for Iowa Premium Beef, which is starting a large processing plant in Tama with the help of state tax incentives. Company spokeswoman Michelle Baumhover refused to say whether Payne is still its coordinator for halal and international sales.
Payne admitted that, from 2007 to 2009, he directed Midamar workers to repackage beef products from a slaughterhouse that wasn't approved for export to Malaysia and Indonesia to make them appear they came from an approved plant. That scheme involved 22 shipments totaling 124,000 pounds of beef, the document shows.
He also admitted that as demand grew for halal beef, Midamar had difficulty finding enough product prepared by Muslim slaughtermen as the company advertised, so it supplemented purchases with kosher beef slaughtered by rabbis at a Minnesota plant. All cattle at that plant were killed using a stunning device, despite Midamar's claim on its website that the practice wasn't allowed for halal slaughter, the document says. Sayed has disputed that claim.
Payne has been released pending sentencing, for which a date hasn't been set. He faces a maximum of one year in prison, but sentencing guidelines may call for probation to six months in jail. Payne, who didn't return a message, also agreed to pay a $20,000 fine.