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President of Blue Bell Indicted on Felony Charges Following Listeria Outbreak

 05/05/2020

Approximately five years after the outbreak of listerosis traced to three manufacturing plants operated by Blue Bell Creamery, Paul W. Kruse, then CEO of the family-led company has been indicted by the Department of Justice on numerous federal felony charges.  The allegations include conspiracy to suppress documentation relating to Listeria contamination in plants and conducting a shelf-recall without disclosing the potential presence of the pathogen in products.  In addition, Kruse has been charged with six counts of wire fraud with all charges carrying sentences of up to 20-years.

 

The company operated plants in Broken Arrow OK., Sylacauga, AL. and Brennan TX., the principal area of operation. Paul Kruse assumed the position of CEO in 2004 replacing his uncle Howard. He resigned as president and Chairman of Blue Bell in 2017.

 

 

Suspension of all operations following investigations by the CDC and direct action by the FDA together with the negative publicity resulted in heavy losses for the company. Fortunately the Kruse family was bailed out by Sid Bass, allowing Blue Bell to recover market share overa period of three years following the 2015 event. 

 

Blue Bell settled with shareholders alleging mismanagement for $15 million in April 2020.  Blue Bell agreed to pay a fine of $19.4 million including forfeitures as a civil penalty.  Kruse will probably mount a defense based on applying his best endeavors to limit the infection resulting from known contamination of plants as disclosed by internal documents and with Listeria contamination in plants confirmed by the FDA.

 
Paul W Kruse CEO Blue Bell Creamery

It remains to be seen whether in the event of a guilty verdict whether penalties will be similar to those meted out to Stewart Parnell and co-defendant’s responsible for the 2007 to 2009 outbreak of salmonellosis caused by products from the Peanut Corporation of America. Depending on the diligence of the DOJ, Kruse if found guilty, might receive a slap-on-the-wrist sentence as imposed on Jack DeCoster and his son Peter for their egregious involvement in the extensive Salmonella Enteritidis outbreak in 2010.