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Egg producers get prison after sickening thousands

 

 

By JIM RUTLEDGE

D.C. Correspondent

 

SIOUX CITY, Iowa — A father and son who operated Quality Egg Co., LLC of Gait, Iowa, are appealing their bribing convictions in a scheme that allowed contaminated eggs to reach consumers during the spring and summer of 2010, causing an outbreak that sickened 1,939 victims nationwide with salmonella poisoning and led the largest egg recall in U.S. history.

Austin "Jack" DeCoster, 81, the company owner, and Peter DeCoster, 51, the chief operating officer, were sentenced to three months each of imprisonment and one year of strict supervised probation on April 13 by U.S. District Court Judge Mark W. Bennett for the Northern District of Iowa. The pair were also fined $100,000 and ordered to pay $83,008 in restitution. They had pled guilty to federal misdemeanor fraud charges last year.

Quality Egg was also a defendant in the five-year-old case and pled guilty to two felonies, one for bribing the federal food inspector and the second to defrauding consumers by introducing out-of-date and misbranded eggs sold throughout the country. The company has paid a $6.8 million fine.

The men each pled guilty to one count of introducing adulterated food into interstate commerce, admitting the company’s shelled eggs were adulterated and contained a serotype known as Salmonella Enteriditis, a poisonous and deleterious substance that causes serious injuries. Centers for Disease Control and Prevention officials in Atlanta said as many as 56,000 peopled could have been sickened.

The U.S. Food and Drug Administration (FDA) has identified the Quality Egg employee who made the bribe to the unidentified USDA inspector as 64-year-old Tony Wasmund, of Willmar, Minn. He will be sentenced in late May after pleading guilty earlier to paying $300 to the federal food safety inspector.

Willmar is a former brother-in-law to Peter DeCoster but the FBI says it does not believe the younger DeCoster was aware of the bribe.

"This was a classic case of putting profits over public safety," said FBI Special Agent Grant Permenter, who was part of a joint task force of FBI, FDA and USDA agents and inspectors who worked the several years-long investigation.

"As with a lot of fraud cases," he said, "Quality Egg’s crimes were committed over and over for years, and eventually, these illegal practices caught up with them. But this case was not just about deception; people got sick. There was a serious public safety issue here. Quality Egg’s business practices put the public at risk – at times, substantial risk."

In an FBI May 7 summary of the case, the pair admitted to bribing a USDA food inspector who released the eggs for distribution after the eggs had been retained for food quality issues. The eggs had been "red tagged" for failing to meet minimum USDA quality grade standards. "From 2006 until 2010, Quality Egg employees affixed labels to egg shipments that indicated false expiration dates with the intent to mislead state regulators and retail egg customers regarding the true age of the eggs," according to the summary.

Permenter added the USDA inspector who received the bribes from Quality Egg was in ill health and died before he could be charged with any crimes. "Had he lived," he said, "he would have been charged, and in all likelihood, would have gone to jail as well."

In the end Permenter said, "It seems obvious that company profits outweighed other concerns. By being able to circumvent the inspection process through bribes and not having to remove the tainted eggs from its inventory, the company saved a significant amount of money.

"When you start bending your ethical and moral fibers because there are dollar signs in front of you, a lot of bad things are likely to happen."

Notices of criminal appeal are not unusual in federal fraud cases and take time to adjudicate, typically a year or longer. Both men remain free while they pursue their appeals. Company officials say Quality Egg, LLC is facing possible bankruptcy. Attorneys for the elder DeCoster say their client has made charitable contributions totaling $16 million over the past four years and his Irrevocable DeCoster Trust has reached nearly $300 million.

5/13/2015