Iowa Egg Company and 2 Execs Charged in 2010 Salmonella Outbreak

An Iowa company and two executives are expected to plead guilty to selling tainted eggs that were responsible for a 2010 salmonella outbreak that sickened thousands and led to an unprecedented recall of 550 million eggs, according to court documents filed Wednesday.

Disgraced egg industry titan Austin “Jack” DeCoster and son Peter DeCoster are charged with introducing adulterated food into interstate commerce, a misdemeanor that carries a maximum sentence of one year in jail. A charging document filed by federal prosecutors alleges that their company, Quality Egg LLC, sold eggs tainted with salmonella from early 2010 until the August 2010 recall and that the DeCosters were the responsible corporate officers.

The DeCosters are scheduled to plead guilty June 3 as part of plea agreements expected to resolve the four-year investigation, though it’s unclear whether prosecutors will recommend jail. The punishment will be handed down in the same federal courthouse where Jack DeCoster received probation in 2003 for knowingly hiring illegal immigrants.

Two felonies also were filed against Quality Egg, which includes the DeCosters’ former network of chicken farms and egg production sites in northern Iowa. Corporations can face criminal charges under the theory that they are responsible for employees’ actions, with felony convictions carrying fines of $500,000 apiece, or more, depending on the amount of loss.

The company is charged with introducing misbranded food into interstate commerce by selling products with labels that “made the eggs appear to be not as old as they actually were” from 2006 to 2010. It also is charged with paying bribes to influence a U.S. Department of Agriculture inspector on at least two occasions, including in April 2010, to approve eggs that had been retained for failing to meet federal standards.

The company also is expected to plead guilty. Frank Volpe, an attorney representing Jack DeCoster and Quality Egg, declined comment on Wednesday.

Seattle attorney Bill Marler, who represented 100 of the poisoning victims, said he believed the deal would allow prosecutors to seek a hefty fine from Quality Egg.

Marler said the case signals a new stance from prosecutors who have been reluctant to charge executives with selling tainted food because of the difficulty of proving intent. The charges do not allege the DeCosters knew their eggs were tainted. That was also the case with Colorado cantaloupe farmers who were sentenced to home detention in January for selling products tied to a deadly listeria outbreak.

“They are sending a pretty strong message to food manufacturers that if they ship – knowingly or not – contaminated food across state boundaries, they can be held criminally liable,” Marler said. “That’s a big deal.”

Health officials in 2010 noticed a spike in reports of salmonella, which causes fever, cramps and diarrhea and can require hospitalization. They traced those illnesses back to shell eggs that came from Quality Egg and another Iowa company, Hillandale Farms, which received feed and hens from Quality Egg. The tainted eggs were served in restaurants and sold in grocery stores under several brand names.

Federal investigators found salmonella at both locations along with filthy conditions including dead chickens, insects, rodents and towers of manure. The companies issued recalls that eventually covered 550 million eggs.

The Centers for Disease Control says 1,900 reported illnesses were linked to the outbreak, the largest of that strain of salmonella since the start of the agency’s surveillance of outbreaks in the 1970s. The CDC estimates that it caused as many as 60,000 unreported illnesses.

Jack DeCoster, 79, racked up food safety, labor and environmental violations over four decades as he built one of the nation’s largest egg production companies.

In congressional testimony, DeCoster said he was horrified to learn that his products sickened consumers and apologized. Peter DeCoster, 50, who managed the farms’ daily operations, promised sweeping food safety changes. But the DeCosters announced in 2011 that they were getting out of the industry, selling operations in Maine, Ohio and Iowa.

A former egg farm manager, Tony Wasmund, was the only other person charged before Wednesday. He pleaded guilty in 2012 to conspiring to pay a $300 bribe to a USDA inspector, the same allegation contained in Wednesday’s filing. Wasmund’s attorney, Rick Kerger, confirmed that he’s cooperating with prosecutors under a plea agreement that could allow him to receive a reduced sentence in September.