A Texas grand jury has charged former Blue Bell Creameries LP President Paul Kruse with wire fraud and conspiracy in connection with an alleged scheme to cover up the company’s sales of listeria-tainted ice cream in 2015, the U.S. Justice Department announced Wednesday.
In an indictment filed in federal court in Austin, Kruse 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, Texas, factory tested positive for listeria, a dangerous pathogen that can lead to serious illness or death in vulnerable populations such as pregnant women, newborns, the elderly and those with compromised immune systems.
Kruse allegedly orchestrated a scheme to deceive certain Blue Bell customers, including directing employees to remove potentially contaminated products from store freezers without notifying retailers or consumers about the real reason for the withdrawal. The indictment alleges that Kruse directed employees to tell customers who asked about the removal that there was an unspecified issue with a manufacturing machine. The company did not immediately recall the products or issue any formal communication to inform customers about the potential listeria contamination.
“American consumers trust that the individuals who lead food manufacturing companies will put the public safety before profits,” said Acting Assistant Attorney General Jeffrey Bossert Clark of the Justice Department’s Civil Division. “The Department of Justice will take appropriate action against those who ship contaminated products and choose not to tell consumers about known risks.”
Public recall notifications did occur in March and April of 2015 after testing linked listeria contamination to Blue Bell products.
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 Sept. 17, 2020, the court sentenced the company to pay criminal penalties totaling $17.25 million. Blue Bell also agreed to pay 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, including the military.
Blue Bell temporarily closed all of its plants in late April 2015 to clean and update its facilities. Since reopening its facilities in late 2015, Blue Bell has taken significant steps to enhance sanitation processes and enact a program to test products for listeria prior to shipment.
Kruse was previously charged on May 1, 2020, during the temporary suspension of federal grand juries due to the pandemic. Those charges were dismissed, and the new indictment has been returned now that grand jury proceedings have resumed operations.