The former CEO of Blue Bell will not have to face another felony fraud trial over the deadly 2015 listeria outbreak linked to the company’s creameries after inking an agreement with the government Wednesday pleading guilty to a misdemeanor.
Prosecutors initially told the court after the August mistrial that they intended to take Kruse to trial again. Instead, Paul Kruse pled guilty to a misdemeanor under the Food Drug and Cosmetic Act, for “introducing adulterated foods into interstate commerce,” and agreed to pay a $100,000 fine.
The charge does not require proof of intent or knowledge of the tainted product and is the same charge the government brought against Blue Bell in September 2020, resulting in what was at the time the largest-ever criminal penalty in a food safety case: $17.25 million.
Kruse’s attorney, Chris Flood of Flood & Flood, said he had been in discussions with the government about pleading to the misdemeanor before Kruse was even indicted.
“I had been very adamant in my position that he had not committed fraud,” Flood said. “He just didn’t do it. He didn’t commit fraud, it just took a long time to convince the government.”
Flood said Kruse was relieved not to have to face another criminal trial, but was prepared to fight the charges. Had another trial taken place, Flood—who put on no witnesses after the government rested in the first trial—said he may have put Blue Bell employees on the stand to testify on Kruse’s behalf.
“There were a lot of Blue Bell employees lined up to testify how good of a CEO Paul was and how honest he was and how it was never his intent to defraud anyone,” Flood said. “He wanted to handle the recall the right way.”
In August 10 members of a 12-person jury told Flood they would have found Kruse not guilty of the charges and U.S. District Judge Robert Pitman declared a mistrial after four days of deliberation, following a week of testimony.
Kruse was accused of covering up the outbreak and was indicted in October 2020 on one count of attempt and conspiracy to commit mail fraud and six counts of fraud by wire, radio or television. The government alleged Kruse crafted a written statement that concealed the company’s knowledge that its products tested positive for listeria and instructed his employees to distribute the statement to anyone who asked about the removal of products from shelves.
The wire fraud counts stem from the six emails sent by Blue Bell sales employees to customers who asked why the products had been removed from shelves between Feb. 19 and April 7 of 2015.
Had Kruse been convicted of fraud, which carries a maximum 20-year sentence per count, his prison time would have depended in part on the calculations of loss, which Flood said would have been an issue for the government because “nobody lost money.”
“One of the things that this case shows is that if you stand up to the government, the truth ultimately will prevail,” Flood said. “That’s truly what this case illustrates. If you’re willing to stand up and fight, the truth will prevail.”
Kruse is also represented by John D. Cline of San Francisco and David W. Overhuls of Houston.
Matthew Joseph Lash, Patrick Hearn, Anthony J. Nardozzi, Kathryn A. Schmidt and Tara M. Shinnick prosecuted the case for the government.
The case number is 1:20-cr-00249.