BRENHAM, Texas – The United States government agreed on Wednesday to dismiss all fraud charges against former Blue Bell CEO Paul Kruse, with parties agreeing to a misdemeanor fine instead.
“The settlement confirms what Mr. Kruse has been saying from the very beginning, no one at Blue Bell ever intended to defraud its customers, and we are happy that the government has reached the same conclusion,” said Chris Flood, Kruse’s attorney. “This is the right result; it became clear during the trial last year that the government overcharged the case.”
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Kruse has agreed to plead guilty to a misdemeanor under the Food, Drug and Cosmetic Act (21 U.S. Code § 331(a)) for being the CEO of the company when tainted product was manufactured. He has also agreed to pay a $100,000 fine.
The fraud allegations provided up to 20 years in jail for each count.
A misdemeanor under the Food, Drug and Cosmetic Act does not need proof of intent or knowledge of the tainted product and is known as a “strict liability crime.”
A misdemeanor Food Drug and Cosmetic Act violation is the same charge that the company pleaded guilty to in 2020.
“I am grateful to all my friends and family, particularly the Blue Bell family, who have stood behind me during this difficult time,” Kruse said. “It was a long road to get here, but I am so glad I stood up for what was right.”
What happened?
In 2010, a Blue Bell quality control employee formed a meeting with other Blue Bell employees and plant management to discuss “condensate and (roof) leak concerns in all facilities” noted in government agency inspections. According to officials, Kruse knew of these problems, but he and Blue Bell failed to correct roof leaks, condensate problems and other sanitary conditions that continued at Brenham Facility and Broken Arrow Facility until 2015.
In 2011, a Blue Bell quality control employee created a program to periodically test Blue Bell finished products with high coliform results, which is used as an indicator of the sanitary conditions of the manufacturing facilities. According to court records, Kruse was informed about the presumptive positive liter testing and ordered the Blue Bell quality control to stop the further testing and instructed another Blue Bell quality control employee to destroy hard copy and electronic records of the presumptive positive product test results.
In March 2015, the FDA conducted a test on one of the Blue Bell ice cream products, which linked the listeria strain to five patients who were hospitalized in Kansas for listeria by ingesting contaminated food. That same month, the FDA, CDC and Blue Bell all issued public recall notifications on March 13, 2015. A second recall was made on March 23, 2015 when subsequent tests confirmed listeria contamination in a product made at another Blue Bell facility in Broken Arrow, Oklahoma.
According to the CDC, a total of 10 people were hospitalized with listeriosis related to this outbreak. Cases reported from the following states: One person in Arizona, five in Kansas, one in Oklahoma and three in Texas. Three of the people in Kansas who contracted listeriosis died.
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