New documents filed in U.S. District Court for Western Texas in Austin say the former chief executive of Blue Bell Creameries remains free on a $50,000 unsecured bond.
Federal Magistrate Judge Mark Lane ordered Brenham, TX, resident Paul Kruse freed immediately after conditions of the defendant’s release were processed by the court.
Kruse, who retired from Brenham, TX -based Blue Bell three years ago, was on May 1 charged with one federal count of conspiracy and six instances of federal wire fraud stemming from the 2015 listeria outbreak linked to the ice cream company that caused three deaths among 10 confirmed cases of listeriosis.
At the same time, federal prosecutors announced Blue Bell, as a company, agreed to pay a criminal fine and forfeiture totaling $17.25 million. The company also agreed to pay an additional $2.1 million to resolve civil False Claims Act allegations about ice cream products manufactured under insanitary conditions and sold to federal facilities.
That total payment of $19.35 million is second only to the $25 million fine recently imposed on Chipotle Mexican Grill to resolve federal food safety violations associated with contaminated food the fast-food company served at several of its restaurants from 2015 to 2018.
In the bond agreement, signed by Kruse, the former Blue Bell chief agrees to appear when required at the U.S. Courthouse in Austin, notify the court’s pre-trial services if his address or contact numbers change, and provide a DNA sample if one is authorized.
Kruse also promised not to keep a firearm and restrict his travel to Texas unless he gets the court’s permission to travel out of the state. Travel to Mexico is prohibited.
With conviction or a guilty plea, Kruse could be sentenced to 20 years in prison and a $250,000 fine for each of the specific federal felony counts. Judge Lane waived physical appearance by Kruse, and everybody else, from the defendant’s initial appearance because of the current coronavirus pandemic.
“COVID-19 poses a potential health risk to the court, the court’s staff, Mr. Kruse, counsel for Mr. Kruse, counsel for the United States, and the general public,” Lane ruled. “This risk is mitigated by limiting in-person interactions and appearances when possible. All parties have agreed that the initial appearance can be accomplished either telephonically or virtually and that Mr. Kruse’s physical appearance at the initial appearance is unnecessary.”
Kruse is expected to plead “not guilty” to all charges. Kruse, himself also an attorney, has retained Chris Flood of Houston and John D. Cline of San Francisco as his defense team.
Court documents are currently silent on whether a plea has been entered, but Kruse has retained his right to counsel and a preliminary hearing. The next court action has not yet been scheduled.
The Department of Justice (DOJ) has named veteran federal prosecutors Matthew J. Lash and Patrick Hearn to represent the government. The investigation that led to the charges was headed by Hearn from DOJ’s Consumer Protection Branch. He was also on the 2014 prosecution team that sent Stewart Parnell and other managers of the now-defunct Peanut Corporation of America to prison for 62 years.
Blue Bell Creameries is a 113-year old company that began in Texas. Kruse was praised for the company’s come-back after the 2015 outbreak caused the shutdown of its production facilities for deep cleaning and repairs, and making its 66 brands of flavored ice-cream unavailable. Last year, Blue Bell’s average quarterly revenues topped $1 billion, making it one of the Top 10 ice cream manufacturers in the country.
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