Former Blue Bell Creameries President Charged with Wire Fraud and Conspiracy
Former Blue Bell Creameries president Paul Kruse was indicted by a grand jury Tuesday after allegedly attempting to cover up sales of Listeria-tainted ice cream in 2015.
An indictment filed in federal court in Austin charges Kruse with seven counts of wire fraud and conspiracy to commit fraud.
Investigators say state officials in Texas warned Blue Bell in February of 2015 that two ice cream products manufactured in the company's Brenham, Texas plant had tested positive for Listeria monocytogenes - a pathogenic bacteria that can cause serious illness or death, and is particularly dangerous to pregnant women, newborns, the elderly, and people with compromised immune systems.
Kruse is accused of having instructed employees to remove potentially contaminated products from store freezers without notifying retailers or customers of the reason for their removal. If pressed for details, employees were reportedly directed to provide customers with a statement penned by Kruse claiming that there had been an unspecified issue with a manufacturing machine.
According to federal officials, Blue Bell did not immediately recall the affected products under Kruse's leadership, nor did it issue any formal communication to inform customers of the potential contamination.
Tuesday's indictment further alleges that tests conducted by the FDA and CDC in March of 2015 linked the strain of Listeria in one of the affected Blue Bell products to a strain that sickened five people at a Kansas hospital with listeriosis - a severe illness caused by the consumption of Listeria-contaminated food.
Blue Bell published a first round of public recall notifications on March 13, 2015. After subsequent tests confirmed Listeria contamination at a Blue Bell plant in Broken Arrow, Oklahoma, further recalls were issued on March 23, 2015, and additional positive tests prompted a recall of all Blue Bell ice cream products in April of 2015.
According to the indictment, there had been reports of "condensate and roof leak concerns in all [Blue Bell] facilities" since as early as 2010.
Officials say tests of finished products for the presence of coliform bacteria - commonly used as an indicator of overall quality and sanitary conditions in food manufacturing plants - sometimes returned results so in excess of Texas Administrative Code standard that Blue Bell lab technicians couldn't count them. Investigators say Kruse approved the shipment of these products anyway.
The grand jury further alleges that in April of 2011, Kruse met with a quality control employee who'd created a program to periodically test Blue Bell products with high coliform results for the presence of Listeria and ordered that employee and a fellow executive to cease such testing. When two samples sent to a lab before that order was issued returned presumptively positive for Listeria, Kruse allegedly ordered the testing ceased again.
According to the U.S. Department of Justice, Patrick Hearn and Matt Lash of the Civil Division’s Consumer Protection Branch are prosecuting the case against Kruse with assistance from Shannon Singleton of the FDA’s Office of Chief Counsel. The criminal investigation was conducted by the FDA’s Office of Criminal Investigations and the DCIS. The DOJ wants to remind the public that all defendants are entitled to the presumption of innocence until proven guilty beyond a reasonable doubt.
Back in May of 2020, Blue Bell Creameries pleaded guilty to two counts of distributing adulterated food products in violation of the Federal Food, Drug, and Cosmetic Act. On September 17, a court sentenced the company to pay $17.25 million in criminal penalties. The company also agreed to pay $2.1 million to resolve civil False Claims Act allegations connected to products manufactured under unsanitary conditions that were sold to federal facilities, including the military.
According to the DOJ, the $19.35 million in fine, forfeiture, and civil settlement payments from Blue Bell constitute the second largest amount paid to resolve a food safety matter in U.S. history.
Since 2015, Bell Bell has significantly stepped up its sanitation and testing processes.