Blue Bell Agrees to Guilty Plea, Fine for Listeria Ice Cream

(Bloomberg) -- Blue Bell Creameries Inc., a Texas-based ice cream maker, agreed to plead guilty and pay $19.35 million in fines for shipping frozen treats tainted with listeria in 2015 and deliberately failing to disclose the contamination to the public, the U.S. Department of Justice said.

The company's former president, Paul Kruse, was charged with seven felony counts related to the cover-up of the potentially fatal bacteria, the department said in a statement Friday.

Blue Bell was forced to recall its products and shut down factories in March and April of 2015 after federal food-safety regulators linked a strain of listeria monocytogenes from one of the company's ice cream products to a strain that sickened five patients in a Kansas hospital.

However, company officials had been told by Texas food safety officials a month earlier that three of its products were tainted with the pathogen, which can cause serious illness or death in vulnerable consumers, court records show.

Blue Bell directed delivery drivers to quietly remove those products from store shelves but didn't tell the public or issue a formal recall until U.S. Food and Drug Administration testing revealed further contamination, according to the government.

After thorough cleaning and enhanced sanitation processes were implemented, Blue Bell reopened its factories in late 2015.

Kruse, Blue Bell's former president, is accused of masterminding the cover-up, including directing employees to tell retailers the swap-outs stemmed from “an unspecified issue with a manufacturing machine” rather than listeria contamination.

“Paul Kruse is innocent of these charges, and we have confidence that a Texas jury will see it that way,” Chris Flood, Kruse's lawyer, said in a phone interview. “We look forward to telling the whole story of how my client, along with all of the other employees, did the best they could with the information they had at the time.”

Blue Bell agreed to plead guilty to two misdemeanor counts of distributing adulterated ice cream products and pay a $17.25 million fine. The company also agreed to pay another $2.1 million in fines to resolve allegations it sold tainted ice cream to federal facilities.

Last month, the company's board agreed to a $15 million settlement in a civil suit filed by a shareholder.

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