Big Fine and Guilty Plea Might Keep DeCosters Out of Jail

Austin “Jack” DeCoster and his son, Peter DeCoster, will accept some responsibility today for their contaminated eggs, which made almost 62,000 people sick four years ago, but don’t look for either man to serve much in the way of jail time.

Plea agreement details released ahead of today’s federal magistrate hearing in Sioux City, IA, show the DeCosters have a deal with the government to pay about $6.8 million, which, in turn, greatly reduces their exposure to federal incarceration.

The two men and their company, Quality Egg LLC, are making their first appearance in court as defendants this morning for arraignment and a hearing to allow the court to accept the plea agreement.

Court documents show the detailed agreement was reached in mid-April, a month before the federal charges were brought against the former poultry executives. It means the pair may have to make only one more appearance in federal court, and that assumes federal Magistrate Judge Leonard T. Strand does not hand down sentences today.

The agreement is clear that a guilty plea from the company on all counts and acceptance of the $6.8-million fine is the price of more lenient handling of the DeCosters, who will each plead guilty to a single misdemeanor of introducing or causing the introduction of adulterated food into interstate commerce.

According to Peter E. Deegan Jr., the lead prosecutor, all three defendants will waive reading of the indictment and plead guilty as charged. Jack DeCoster will enter the guilty plea for Quality Egg, as he is the trustee of the DeCoster Revocable Trust, which owns the company.

Both men will acknowledge that, in August 2010, while they were in positions of authority at Quality Egg, they introduced shell eggs into interstate commerce that were adulterated because they contained a poisonous or deleterious substance in the form of Salmonella Enteriditis that may have rendered them injurious to health.

In exchange for their guilty pleas, the DeCosters will receive consideration at sentencing, limiting their personal fines to $100,000 and significantly reducing any jail time from the one-year maximum.

Jack DeCoster will also plead guilty to three counts, including felony bribery of a USDA inspector, on behalf of Quality Egg, LLC, which owned the two egg production facilities responsible for the largest shell egg recall in U.S. history.

In the plea agreement, Quality Egg agrees to pay a fine of about $6.8 million for the counts of bribery of a public official (a USDA egg inspector) and introducing misbranded food into interstate commerce. The company will pay another $100,000 fine for introducing adulterated food into interstate commerce.

Quality Egg must deposit about $1.1 million with the court’s clerk by July 9 and then pay the remaining $5.69 million at the date set for sentencing. Quality Egg is also putting up a $10,000 “forfeiture” payment connected to the proceeds of the bribery.

The company will plead guilty to a second felony for selling misbranded food in interstate commerce, beginning Jan. 1, 2006, and continuing to approximately Aug. 12, 2010, the day before the company initiated the recall of more than a half-billion shell eggs. Before that recall began, the DeCoster egg empire is charged with selling eggs labeled to make them appear “not as old as they actually were.”

from Food Safety News » Food Recalls http://ift.tt/1wYCVhB