Iowa company: US probe into whether it falsely labeled items as halal could damage business

IOWA CITY, Iowa — The maker of a popular brand of food for observant Muslims says it is facing a potentially crippling investigation into whether it falsely labeled meat products as processed in compliance with Islamic law.

The Midamar Corp. said in federal court documents that investigators seized its main bank account and business records under search warrants executed last month. A judge last week upheld the government’s seizure of $454,000 in bank funds and rejected the company’s request to return the money.

No criminal or civil charges have been filed, and U.S. District Judge Linda Reade ruled that the government’s affidavit supporting its search warrant can remain secret so as not to “compromise an ongoing investigation.” The U.S. attorney’s office declined comment Monday on the investigation, which involves the U.S. Department of Agriculture and Internal Revenue Service.

Miramar said in court filings that the seizures relate to vague allegations that it improperly branded and sold meat products as meeting Muslim dietary requirements, called halal, when they did not. The privately held business, which has been in Cedar Rapids for 40 years, dismissed the allegations. And it claims federal investigators are trying to regulate something that must be left to religions under the U.S. Constitution’s separation of church and state.

Midamar says the matter does not involve food safety. Still, its lawyers made public a letter from USDA that noted the agency stopped voluntary inspections at the firm in 2010, after seizing what it called misbranded meat products, before resuming them last year. Such inspections are done at Midamar’s request to ensure their products meet requirements for export.

Investigators seized thousands of pounds of beef products that came from an establishment not approved for export to a foreign country and found falsified export documents for shipments to Indonesia and Malaysia, among other problems, according to the letter.

USDA’s Food Safety and Inspection Service resumed inspections after approving Midamar’s “corrective and preventive measures,” the letter says.