$6.8M Fine Imposed in Tainted Eggs Case

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June 4, 2014

Two owners of an Iowa egg producer pleaded guilty Tuesday to charges related to a massive salmonella outbreak in 2010, the latest prosecution serving notice to the food industry that its leaders can be held criminally responsible for the products they sell.

The outbreak sickened tens of thousands of people and forced the recall of 550 million eggs. Quality Egg agreed to pay a $6.8 million fine under terms of a plea agreement revealed in federal court in Sioux City, Iowa.

The egg producer pleaded guilty to one count of bribery of a public official, one count of introducing a misbranded food into interstate commerce with intent to defraud, and one count of introducing adulterated food into interstate commerce.

Austin "Jack" DeCoster, 79, of Turner, Maine, and Peter DeCoster, 51, of Clarion, IA, each pleaded guilty to one count of introducing adulterated food into interstate commerce.

In January, two Colorado cantaloupe farmers were sentenced to probation and home detention for their role in a listeria outbreak that killed 33 people in 2011.

Lawyer Bill Marler, whose firm represented families of some victims of the Colorado outbreak, says the criminal cases are the biggest in his 20 years in the food safety field. "It's possible these guys could actually go to jail," Marler said of the DeCosters. "That wakes people up. Knowing CEOs can go to jail has more impact on behavior than a lawsuit that ends up being paid off by an insurance company."

Quality Egg acknowledged that, on at least two occasions in 2010, Tony Wasmund or another employee gave a cash bribe to a Department of Agriculture inspector to allow tainted eggs to be sold. The eggs had been "red tagged" for failing to meet minimum USDA quality grade standards. Wasmund, 63, pleaded guilty in 2012 to conspiracy to bribe a public official, selling restricted eggs with intent to defraud and related charges. He is scheduled for sentencing Sept. 12.

Plea agreements indicate the company sold the tainted eggs for about eight months starting in January 2010.

Prosecutors said there was no evidence that the DeCosters knew they were selling tainted products, but they ran the company and were responsible for its activities.

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