Food Safety Magazine

NEWS | October 22, 2020

Blue Bell President Paul Kruse Charged with Wire Fraud and Conspiracy

By Staff

Blue Bell President Paul Kruse Charged with Wire Fraud and Conspiracy

According to the U.S. Justice Department, a Texas grand jury has charged Paul Kruse, the former president of ice cream manufacturer Blue Bell Creameries LP, with wire fraud and conspiracy in connection with the alleged cover-up of the company’s sales of Listeria-tainted ice cream in 2015. He was charged with seven counts of wire fraud and conspiracy to commit wire fraud related to his alleged efforts to conceal from customers what the company knew about Listeria contamination in certain Blue Bell products.

According to the indictment, Texas state officials notified Blue Bell in February 2015 that two ice cream products from the company’s Brenham, TX, factory tested positive for Listeria monocytogenes. Kruse allegedly concocted a scheme to deceive customers, including directing employees to remove potentially contaminated products from store freezers without notifying retailers or consumers about the reason for the withdrawal. The company did not immediately recall the products or issue any formal communication to inform customers about the potential Listeria contamination.

The indictment further alleges that March 2015 tests conducted by the U.S. Food and Drug Administration (FDA) and the U.S. Centers for Disease Control and Prevention linked the strain of Listeria in one of the Blue Bell ice cream products to a strain that sickened five patients at a Kansas hospital with listeriosis, a severe illness caused by ingestion of Listeria-contaminated food.

FDA, CDC, and Blue Bell issued public recall notifications on March 13, 2015. Subsequent tests confirmed Listeria contamination in a product made at another Blue Bell facility in Broken Arrow, OK, which resulted in a second recall announcement on March 23, 2015. Additional positive test results ultimately led Blue Bell to recall all ice cream products in April 2015.

Blue Bell pleaded guilty in a related case in May to two counts of distributing adulterated food products in violation of the Federal Food, Drug, and Cosmetic Act. On September 17, 2020, the court sentenced the company to pay criminal penalties totaling $17.25 million. Blue Bell also paid an additional $2.1 million to resolve civil False Claims Act allegations regarding ice cream products manufactured under insanitary conditions and sold to federal facilities. The total $19.35 million in fine, forfeiture and civil settlement payments constitutes the second-largest amount ever paid in resolution of a food safety-related matter.

Blue Bell temporarily closed all of its plants in late April 2015; since re-opening, the company has taken significant steps to enhance sanitation processes and enact a program to test products for Listeria prior to shipment.

 

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