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Former Blue Bell CEO indicted over 2015 listeria outbreak

American-Statesman staff
Paul Kruse, former president and CEO of Blue Bell Creameries, has been indicted by a Texas grand jury on wire fraud and conspiracy charges. Kruse is accused of directing a plot to conceal unsanitary conditions and a deadly listeria outbreak at the company's ice cream plants in 2015.

Former Blue Bell Creameries president and CEO Paul Kruse has been indicted by a Texas grand jury on wire fraud and conspiracy charges over allegations that he directed a conspiracy to conceal unsanitary conditions and the company’s deadly listeria outbreak in 2015.

The listeria outbreak led to the deaths of three people and forced the Brenham-based ice cream maker to recall all its products.

Kruse, who retired from Blue Bell in 2017, 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,” the U.S. Justice Department said.

The Justice Department alleges that after Texas officials notified Blue Bell in February 2015 that two ice cream products from the company’s Brenham factory had tested positive for listeria, a dangerous pathogen, Kruse “orchestrated a scheme to deceive certain Blue Bell customers, including by 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.”

Kruse had initially been charged with criminal conspiracy in May. However, U.S. District Judge Robert Pitman in June ruled that those charges had to be dismissed after the Justice Department conceded that Kruse had not waived his right to be indicted by a grand jury, which prosecutors did not seek due to the coronavirus outbreak.

The indictment against Kruse comes little more than a month after Blue Bell was ordered to pay $17.25 million in criminal penalties for the outbreak. The company had pleaded guilty in May to two misdemeanor counts of distributing adulterated ice cream products.

“American consumers trust that the individuals who lead food manufacturing companies will put the public safety before profits,” acting Assistant Attorney General Jeffrey Bossert Clark of the Justice Department’s Civil Division said in a written statement. “The Department of Justice will take appropriate action against those who ship contaminated products and choose not to tell consumers about known risks.”

Blue Bell, one of the country’s largest ice cream makers, suffered significant financial losses due to the listeria outbreak. The company, which got its start more than 100 years ago, shut down production for a time in 2015 and recalled 8 million gallons of ice cream after reports of listeria started coming in. In all, 10 people fell ill and three died.

During the 2015 shutdown, Blue Bell deep-cleaned its plants in Brenham, which is about 90 miles east of Austin, in Sylacauga, Ala., and in Broken Arrow, Okla. It also replaced some equipment and reworked procedures. The shutdown resulted in hundreds of layoffs.

Amid the shutdown, Fort Worth billionaire Sid Bass announced plans to invest in Blue Bell in a move he said would help the company stay afloat.

In 2018, the state of Texas said it had completed an enforcement agreement with Blue Bell that allowed operations to resume under expanded monitoring.

When it was ordered last month to to pay $17.25 million in criminal penalties, Blue Bell had said that the court action “closes a difficult chapter in Blue Bell’s history.”

“We learned hard lessons and turned them into determination to make the safest, most delicious ice cream available, with upgraded production facilities, training, safety procedures, and environmental and product testing programs,” the company said in a written statement at the time. “Food safety is our highest priority, and we know we must continue to be vigilant every day.”