Former Blue Bell CEO to plead guilty to charges connected to 2015 listeria outbreak

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Dive Brief:

• Former Blue Bell CEO Paul Kruse plans to plead guilty to a misdemeanor count of introduction of adulterated food into interstate commerce in connection to the 2015 deadly listeria outbreak caused by contamination at the company’s manufacturing facilities. Fraud charges, which would have allowed for up to 20 years in prison for each charge, the former executive faced will be dropped.
• Kruse will face no jail time, but will be assessed a $100,000 fine, according to the plea deal.
• Kruse’s trial last August on a litany of fraud charges related to the 2015 outbreak ended with a hung jury. His second trial was slated to begin April 10.

Dive Insight:

The plea deal draws the saga of the deadly Blue Bell outbreak to a close. In 2015, contamination in ice cream that came from Blue Bell’s manufacturing facilities in Brenham, Texas and Broken Arrow, Oklahoma sickened 10, killed three and resulted in all of the company’s products being recalled.

The company pleaded guilty to two misdemeanor counts of introducing adulterated food products into interstate commerce in 2020, and paid a total of $19.35 million in fines and forfeitures.

Investigators said Kruse knew there had been unsanitary conditions at the factories since 2010. Instead of ordering repairs, he ordered the company to stop testing for listeria, investigators said. And when contaminated products went out from the factory in 2015, instead of issuing an immediate formal recall or statement about listeria-contaminated products, it stopped deliveries or collected some products because of what it called “machine issues.” 

While investigators built a complex case against Kruse, they were unable to convince the jury that he acted fraudulently. The Austin American Statesman, which covered the trial, reported that 10 jurors voted for a not guilty verdict, while two voted to convict.

Kruse’s attorney Chris Flood said in a statement to a Houston NBC affiliate that the settlement confirms what Kruse had said all along: no one at Blue Bell ever intended to defraud its customers.

“We are happy that the government has reached the same conclusion,” he told the station. “This is the right result; it became clear during the trial last year that the government overcharged the case.”

By settling the case, the U.S. Justice Department is able to hold Kruse accountable for the outbreak at Blue Bell. And even though it will likely not end in jail time for Kruse, it is a conviction.

Since 2015, Justice Department policy has dictated corporate misconduct investigations focus on individual wrongdoing. This policy, outlined in a memo from former U.S. Deputy Attorney General Sally Yates, says this strategy deters illegal activity, incentivizes changes in corporate behavior and holds the correct people accountable.

But pushing for trial convictions hasn’t worked well in recent food industry cases recently. Five chicken executives charged in connection with a price fixing scheme faced three trials since 2021. Two ended in mistrials, with no unanimous verdict. The Justice Department pushed for a third trial of the executives, which ended in acquittals.

There have been successes at trial, however. The former leaders of Peanut Corporation of America were convicted by a jury and received 20-plus year prison sentences for a major salmonella outbreak in 2008 and 2009.