Former Blue Bell Creameries CEO Paul Kruse charged with wire fraud

Former Blue Bell Creameries President and CEO Paul Kruse has been charged with wire fraud and conspiracy in connection to an alleged scheme to cover up sales of listeria-tainted ice cream in 2015, officials said.

According to the Department of Justice, Kruse was charged with seven counts of wire fraud and conspiracy to commit wire fraud related to his alleged efforts to conceal from customers what the company knew about listeria contamination in certain products. The indictment was filed in federal court in Austin.

The indictment states officials notified Blue Bell in February 2015 that products from the company's Brenham factory had tested positive for listeria and Kruse allegedly orchestrated a scheme to deceive customers, including by directing employees to remove potentially contaminated products from store freezers without notifying retailers or consumers as to why. Kruse is also accused of directing employees to tell customers there was an unspecified issue with a manufacturing machine. The company did not immediately recall the products or inform customers about the potential contamination, the indictment states.

Charges against Kruse were dropped in July by a U.S. district judge. The order of dismissal document for the United States versus Kruse was signed  by Judge Robert Pitman of the Western district of Texas — Austin Division, stating the dismissal was granted on the grounds of “lack of subject-matter jurisdiction.”

According to a Reuters report at the time, Kruse did not waive his right to be indicted by a grand jury, and federal prosecutors did not pursue assembling a jury at the time due to COVID-19 safety concerns.

“[Prosecutors] argued that dismissing the case now would trigger a six-month grace period to secure an indictment from a grand jury, even after the five-year statute of limitations to charge Kruse has expired — an assertion [Kruse’s] lawyers contest,” the article states.

The Blue Bell company pleaded guilty May 13 to two misdemeanor counts of distributing adulterated ice cream products, according to the Texas Department of Justice website. The company will pay a criminal fine and forfeit over $17 million, in addition to more than $2 million that will be paid to resolve a civil case regarding False Claims Act allegations about the ice cream products as they were sold to military facilities.

In a statement posted to the company's website in May, Blue Bell stated the company had "learned hard lessons and turned them into determination to make the safest, most delicious ice cream available."

"We have worked closely with federal and state regulators as we implemented comprehensive food safety measures," the statement continues. "We brought in independent food safety experts and consultants to ensure transparency and accountability. Food safety is our highest priority, and we know we must continue to be vigilant every day."