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Two tankers going to Kellogg were also part of PCA story

Everybody knows about Peanut Corporation of America, the company that eight years ago was at the center of a nationwide salmonella outbreak that sickened thousands and ended up killing nine.

But how many know about P.P. Sales Inc.? It was the startup peanut brokerage firm that was incorporated and based in Virginia. Vice President of P.P. Sales was Michael Parnell, who is now serving a 20-year prison sentence at a federal lockup in Michigan.

keeblerPB_406x225As disclosed in his most recent briefs to the U.S. Court of Appeals for the Eleventh Circuit in Atlanta, Michael Parnell says P.P sales “was a small operation with two tanker trucks and one customer: Kellogg Company.

“In mid-2007, Michael collaborated with his brother, Stewart Parnell, who was the President and CEO of Peanut Corporation of America (“PCA”), a peanut processing and manufacturing company, to provide peanut paste to Kellogg,” says the brief. “From mid-2007 to 2008, Michael shipped peanut paste from PCA’s Blakely, Georgia plant (PCA Blakely) to a Kellogg production facility in Cary, North Carolina.”

P.P.’s tanker trucks, filled with peanut paste, during those months were making 1,200 round-trips to provide the product Kellogg’s needed to put a little dab of peanut paste on all those Keebler PB sandwich crackers.

Just as his brother lost PCA when it melted down financially after the outbreak, Michael lost his two tanker truck business. Four years later, he was indicted with his brother for fraud, conspiracy, and other charges in a 76-count indictment.

The new court documents are silent about the value of the business that Michael had brokered in the PCA-Kellogg  deal and delivery of the peanut paste.

But there are hints Kellogg’s provided the court with a one-page spreadsheet or as Stewart Parnell’s attorney called it: “a paltry one-page spreadsheet.” It claimed a $21.4 million loss in 2008 and another $24.2 million in 2009.

Kellogg’s claim was for recall costs. The only thing that came with the spreadsheet was a short email about contacting someone else in the company about details.

The FBI agent who collected the recall claims never followed up.

After the seven week jury trial, Michael Parnell was convicted on the conspiracy, fraud, and wire fraud counts, but he was acquitted on all charges of fraudulent introduction of adulterated foods in interstate commerce.

His appeal seeks to reverse both the convictions and sentence.

 

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