Tag Archives: Department of Justice

Susanne Kuehne, Decernis
Food Fraud Quick Bites

Going Against The (Organic) Grains

By Susanne Kuehne
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Susanne Kuehne, Decernis
Organic Grain
Find records of fraud such as those discussed in this column and more in the Food Fraud Database. Image credit: Susanne Kuehne

Organic fraud cases are on the increase and often, the criminals get away with these crimes. The USDA-OIG catching a multi-million dollar case like this one represents just the tip of the iceberg. Over the course of five years, the operator of a grain and seed business misrepresented his products as organic, claiming premium prices and defrauding clients of millions of dollars. Transactions for money and documents crossed multiple state lines in the United States through several related business entities. The business owner was sentenced to several years in prison and hefty fines for wire fraud, money laundering, and for defrauding the National Organic Program.

Resource

  1. United States Attorney’s Office District of South Dakota (February 25 2021). “Florida Man Sentenced for Conspiracy to Commit Wire Fraud and Money Laundering”. The United States Department of Justice.

 

Department of Justice seal

Blue Bell Hit with Record $17.25 Million in Criminal Penalties for 2015 Listeria Outbreak

By Maria Fontanazza
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Department of Justice seal

Remember the 2015 Listeria outbreak linked to Blue Bell Creameries? The outbreak led to three deaths and 10 illnesses between January 2010 and January 2015. On Thursday the Department of Justice ordered the company to pay $17.25 million in criminal penalties for shipping contaminated products linked to that outbreak. The sentence, enforced by U.S. District Judge Robert Pitman (Austin, Texas), is the largest fine and forfeiture ever imposed in a conviction involving a food safety case.

“American consumers must be able to trust that the foods they purchase are safe to eat,” stated – Acting Assistant Attorney General Jeffrey Bossert Clark, Justice Department’s Civil Division in an agency news release. “The sentence imposed today sends a clear message to food manufacturers that the Department of Justice will take appropriate actions when contaminated food products endanger consumers.”

In May 2020 Blue Bell pleaded guilty to two misdemeanor counts of distributing adulterated ice cream. The following is an excerpt from the Department of Justice news release:

“The plea agreement and criminal information filed against Blue Bell allege that the company distributed ice cream products that were manufactured under insanitary conditions and contaminated with Listeria monocytogenes, in violation of the Food, Drug and Cosmetic Act. According to the plea agreement, Texas state officials notified Blue Bell in February 2015 that samples of two ice cream products from the company’s Brenham, Texas factory tested positive for Listeria monocytogenes, 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. Blue Bell directed its delivery route drivers to remove remaining stock of the two products from store shelves, but the company did not recall the products or issue any formal communication to inform customers about the potential Listeria contamination. Two weeks after receiving notification of the first positive Listeria tests, Texas state officials informed Blue Bell that additional state-led testing confirmed Listeria in a third product. Blue Bell again chose not to issue any formal notification to customers regarding the positive tests. Blue Bell’s customers included military installations.”

Susanne Kuehne, Decernis
Food Fraud Quick Bites

Things Are Smelling Fishy Yet Again

By Susanne Kuehne
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Susanne Kuehne, Decernis
Food Fraud, Decernis
Find records of fraud such as those discussed in this column and more in the Food Fraud Database. Image credit: Susanne Kuehne.

The nose knows: In case fish smells “fishy”, it is no longer fit for human consumption. A Canadian fish importing company pleaded guilty to the import of 9,000 pounds of rotten and partially decomposed fish into the United States. The potentially adulterated fish was sampled by the FDA, who declared it to be too spoiled to be sold in the country, hence refused its entry into the United States—but the fish was imported via a wrong shipment declaration anyway. The crime of importing refused food carries a prison sentence of up to a year.

Resource

  1. Department of Justice, The United States Attorney’s Office, Western District of Washington (October 18, 2019). “Canadian seafood wholesaler, and owner, plead guilty to illegally importing fish into U.S.
Susanne Kuehne, Decernis
Food Fraud Quick Bites

The Hellcat of Pet Food

By Susanne Kuehne
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Susanne Kuehne, Decernis
Food Fraud, pet food, cat food
Find records of fraud such as those discussed in this column and more in the Food Fraud Database. Image credit: Susanne Kuehne.

Pet food is a highly profitable business. Global pet food sales hit a record $90 billion in 2018, and adulterated or mislabeled feed is not uncommon. In the United States, the FDA ensures correct labeling and adherence to quality standards in pet food. Over the course of six years, a processing facility in Texas shipped low quality, mislabeled ingredients such as feathers and by-products, labeled as premium single ingredients, to pet food manufacturers and distributors. The guilty party had to pay $4.5 millions in restitution to the fraud victims, and the defendant is on a five year probation.

Resources

  1. Department of Justice, U.S. Attorney’s Office, Western District of Missouri (October 24, 2019). “Texas Manager Pleads Guilty to Pet Food Fraud, Company Pays $4.5 Million Restitution”. Retrieved from The United States Department of Justice.
Susanne Kuehne, Decernis
Food Fraud Quick Bites

A Broken Record

By Susanne Kuehne
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Susanne Kuehne, Decernis
Food Fraud, E.Coli, Decernis
Find records of fraud such as those discussed in this column and more in the Food Fraud Database. Image credit: Susanne Kuehne

Over the course of almost a full year, laboratory documents were falsified by the owner and the quality control officer of a Connecticut meat processing company. None of the reported beef samples were actually taken and tested for E. coli. The letterhead of a formerly utilized inspection laboratory was fraudulently used to falsify the test documents, an act that carries a maximum term of five years in prison. Fortunately, no illness was reported from consumers who purchased the meat products.

Resources

  1. The United States Attorney’s Office (September 23, 2019). “Quality Control Officer of Connecticut Meat Supplier Admits Fabricating E. Coli Test Results”. Department of Justice, U.S. Attorney’s Office, District of Connecticut.
Susanne Kuehne, Decernis
Food Fraud Quick Bites

I Have a Beef with You

By Susanne Kuehne
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Susanne Kuehne, Decernis
Food Fraud, Decernis, Prime beef
Find records of fraud such as those discussed in this column and more in the Food Fraud Database. Image credit: Susanne Kuehne

Over the course of three years, wholesale meat fraudsters in Brooklyn, NY, removed the USDA stamp on “Choice” beef and applied a counterfeit USDA “Prime” stamp to sell the fraudulently labeled meat at a premium price. A conviction can get the defendants a prison sentence of up to 20 years, even public health was not endangered, however, the USDA is taking integrity and quality of food very seriously.

Resources

  1. John Marzulli, U.S. Attorney’s Office (September 24, 2019). “Two Defendants Charged in Scheme to Sell Fraudulently Misbranded Beef Products”. Department of Justice, U.S. Attorney’s Office, Eastern District of New York
Randy Fields, Repositrak
FST Soapbox

Update: Non-FSMA Food Safety Litigation

By Randy Fields
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Randy Fields, Repositrak

The keynote panel at the 2017 Food Safety Summit in May had, as any food safety professional would expect, a focus on how companies are coping with FSMA and the increased scrutiny they may face. There was unanimous belief on the panel that enforcement is coming and all trading partners need to be prepared, but there was also a look beyond FSMA adoption to what will come next.

First, though, where do we stand with FSMA-related litigation?

Shawn Stevens, one of the leading food industry lawyers, told attendees that it’s important for all retailers, wholesalers, suppliers and affiliates to understand that FDA was commanded by Congress to stop foodborne illness and the impact it has on Americans, plain and simple. His advice is for food pros to learn all aspects of FSMA and do it quickly, saying the goal now is to avoid making the operational mistakes that may result in criminal exposure for the company and its executive leadership team.

Going forward, the industry will not only have to comply with FSMA, but it will also need to address recalls, risk mitigation and other complex food safety issues not directly related to FSMA. Foodborne illness outbreaks will still cause legal claims that can be compounded by personal injury suits and potentially impact a retailer’s reputation negatively. Also, there are trends in organic foods, GMOs, gluten-free items and more that will impact the retailer, supplier and ultimately may result in more litigation.

Jeffrey Steger, assistant director of the Consumer Division at the U.S. Department of Justice (DOJ), reported that companies shouldn’t expect a waning of the federal government’s support of non-FSMA enforcement actions. The DOJ gets involved in cases where there is significant harm to consumers, where food company executives had prior knowledge, and where legal action will protect the integrity of the regulatory system and prevent future harm. It has pursued many high-profile food industry prosecutions to date and he believes this trend will continue.

The importance of the FSMA regulations and the responsibilities placed on the food industry shouldn’t be understated in the context of food-related litigation. But there are other new developments in the marketplace and the extended supply chain that are impacting retailers like transparency in packaging, labeling of social responsibility programs, the move toward clean labels and facility auditing requirements.

Recent research by the Food Marketing Institute indicates retailers and suppliers that connect with shoppers in support of food safety are well positioned to build shopper trust and loyalty. The converse must also be true—companies that have their reputation dragged down due to involvement in food safety litigation will surely be poorly positioned to build shopper trust and loyalty.

Retailers and suppliers need to address all food safety-related issues or risk becoming defendants in a lawsuit or further government regulation. To accomplish this goal and, more importantly, to keep their customers safe, food companies need to nurture an enterprise-wide food safety culture that extends from the executive suite to store personnel –all retail employees must be responsible for food safety. Only then will customers recognize the company as being committed to food safety, and only then will the company get ahead of any potential food safety-related litigation.

Department of Justice seal

Seeking Deterrent Effect, DOJ Targets Cases that Have Big Influence

By Maria Fontanazza
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Department of Justice seal

As the Department of Justice (DOJ) continues to prioritize prosecution against food companies that have been involved in recalls and foodborne illnesses, many often wonder how exactly the department decides which companies it will pursue and why. The most notorious recent example is the case against the Peanut Corporation of America (PCA) in which the sentencing of the company’s executives was said to have set a precedent for the industry. One of the reasons the DOJ went after PCA was due to its widespread distribution of food and the fact that the illnesses and deaths were all over the country, according to Michael Blume, director of the consumer protection branch of the DOJ.

“Did any of you hear about [PCA] before the outbreak?” Blume asked the audience at the GMA Science Forum last week. “Consumers have very little ability to protect themselves from foodborne illness. PCA was in all kinds of brands—crackers, Kelloggs, [etc]. For those reasons, we were much more concerned about preventing these kinds of outbreaks and what could the DOJ do about it.”

When assessing contenders for criminal prosecution, there are several common factors that encourages the DOJ to dig deeper:

  • The amount of harm. Has the sale of contaminated food has led to a great deal of illnesses or deaths?
  • Has the company had problems in the past? If it is a first time occurrence, the DOJ is less likely to pursue a case, but if there is a history, “we’re going to look harder,” said Blume. For example, if a government agency or another party has identified a problem, and then the FDA also sees the problem and issues a 483. Then five years later, the company still has not fixed the problem.
  • Similarly, if the DOJ sees that the company has identified internal problems and has chosen not to fix them, and as a consequence, these actions lead to the sale of contaminated food.
  • Where does the company sit in the market? “We can’t [pursue] every case, we have to think about what case will be most impactful,” said Blume. “What case will signal to the rest of industry that there are things they need to think about? If it is a company that people think have a good reputation, etc—to give a signal to industry—there are things that even the very best in industry can run afoul.”
  • If there’s evidence that the company has misled any party. This doesn’t apply to a government body only—it could also be the company’s vendors.
  • The general culture. Although this concept is intangible, the DOJ considers a company’s reputation in the industry and the relationship it has with regulators. Are they trying to fix issues and maintain compliance? That will make a difference and will be weighed in the company’s favor versus companies that choose to ignore problems.

“The DOJ thinks very hard about charging individuals. If there’s a criminal investigation targeting a company, you have to be concerned about who acted within the company and what their role was.” ­– Michael Blume, DOJ

Of course, food companies would like to avoid the heavy hand of the DOJ and for that, Doug Fellman, partner at Hogan Lovells US, LLP, offered several points of advice:

  • Be on guard for red flags that suggest a compliance-related environment in which the company is at risk for having problems. If employees are raising concerns at the facility or about the manufacturing process, don’t let people write those individuals off.
  • Be careful about how any decisions will look in hindsight. Stop on a real-time basis and look at how it will appear in retrospect.
  • If in a recall situation, decisions must be made quickly. Be careful that any decision making won’t to come back and bite the company when someone looks at it with the benefit of time.
  • Always be truthful and candid with the regulators.
  • Ask yourself whether you really know the conditions at the facility. Do people have visibility to what’s happening there?
  • Beware of emails. “Emails form the basis of almost every case I have,” cautioned Fellman.

Should the DOJ show up at your facility, it’s important to be polite and act professional towards agents. Although this may seem obvious, whether or not the agents immediately encounter pushback makes a difference, advised Blume. That said, it’s important to have protocols in place in the event that the DOJ shows up either at a company facility or even at an employee’s doorstep. “We get great evidence from a knock at someone’s door who doesn’t know what to say or when we do an inspection and people don’t know what to do,” said Blume. It’s prudent to discuss in advance when to seek the advice of a lawyer, because the more prepared a company is in handling such an issue, the less likely it is to make incriminating statements.

ConAgra Subsidiary Slapped with Largest Criminal Fine Ever in Food Safety Case

By Food Safety Tech Staff
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Earlier this week ConAgra Grocery Products, LLC, a subsidiary of ConAgra Foods, Inc., was sentenced to pay $11.2 million after pleading guilty to a criminal misdemeanor charge related to shipping peanut butter contaminated with Salmonella. The $8 million criminal fine and forfeiture of $3.2 million in assets is the largest fine ever paid in a food safety case, according to the Department of Justice.

“This case demonstrates companies – both large and small – must be vigilant about food safety,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division in a release.  “We rely every day on food processors and handlers to meet the high standards required to keep our food free of harmful contamination.”

Stephen Ostroff, 2016 Food Safety Consortium
WATCH THE VIDEO: Stephen Ostroff, M.D., FDA deputy commissioner for foods and veterinary medicine discussed the agency’s take on criminal liability at the 2016 Food Safety Consortium

ConAgra admitted that it introduced contaminated Peter Pan and private label peanut butter into interstate commerce (produced and shipped from the company’s facility in Sylvester, Georgia) during an outbreak of Salmonellosis in 2006. The company also admitted that it had been previously aware of the risk of Salmonella contamination in peanut butter dating back to 2004. Among the culprits of the contamination (as identified by company employees) were an old peanut roaster that did not uniformly heat the raw peanuts, a sugar silo damaged by a storm, and a leaky roof that permitted moisture to enter the facility, followed by airflow that may have pushed the contamination throughout the plant.

The company tried to address some of the issues, but the DOJ stated that ConAgra did not fully correct the situation until after the 2006–2007 outbreak.  “While ConAgra did take corrective action eventually, by failing to timely recognize and rectify the problem of salmonella contamination, this company damaged the health of both public consumers and of the agricultural industry overall.  I commend my staff, that of the Consumer Protection Branch of the Civil Division of the U.S. Department of Justice, and the investigators of the FDA, for the excellent work by all in bringing this incident to this conclusion and I hope that it will serve as a reminder to others in the industry of the high cost of failing to protect the public that relies on them to properly meet this responsibility.”

Watch Out, DOJ and FDA Prioritizing Prosecution

DOJ Launches Criminal Investigation into Dole

By Food Safety Tech Staff
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Learn innovative ways to mitigate the threat of Listeria at the Listeria Detection & Control Workshop | May 31–June 1, 2016 | St. Paul, MN | LEARN MOREOn Friday the news broke that the U.S. Department of Justice (DOJ) was investigating Dole Food Co. over the Listeria outbreak involving packaged salad. The deadly outbreak was linked to salad produced at Dole’s Springfield, Ohio facility. Although the DOJ has not yet commented on the criminal investigation, The Wall Street Journal reports that Dole reported positive Listeria samples at its facility as early as July 2014.

In January 2016, Dole voluntarily recalled all salad mixes produced at the Springfield plant, by which point 33 people in the United States and Canada had fallen ill with Listeria and four had died. The CDC reported on March 31 that the outbreak appeared to be over and Dole restarted production at the Springfield facility in April.

In a press release on the company’s website, Dole stated that the issues FDA reported at its Springfield facility have been corrected. “We have been working in collaboration with the FDA and other authorities to implement ongoing improved testing, sanitation and procedure enhancements, which have resulted in the recent reopening of our Springfield salad plant.” It also acknowledged that it had been contacted by the DOJ related to an investigation and will be cooperating with the department.