EGG company Quality Egg LLC agreed to pay $6.8 million in fines for selling old eggs with false labels, along with contaminated products that caused a massive salmonella outbreak in 2010, according to a statement from the U.S. Department of Justice.
Austin "Jack" DeCoster and Peter DeCoster, two owners of Quality Egg, pleaded guilty last week in federal court in Sioux City, Iowa, in connection with the distribution of adulterated eggs in interstate commerce, sending federal notice that food companies can be held criminally responsible for products sold.
Former Quality Egg employee Tony Wasmund confessed to one count of conspiracy to bribe a public official, sell restricted eggs with the intent to defraud and introduce misbranded food into interstate commerce with the intent to defraud and mislead on Sept. 12, 2012, according to the DOJ statement.
Normally, surplus eggs are sold at half-price to a breaker facility, which sanitizes the eggs and turns them into a liquid product. In order to avoid discounting its extra eggs, Quality Egg relabeled old eggs to sell them to the public, Wasmund told investigators.
As part of its plea agreement, Quality Egg acknowledged that there were numerous ways in which it mislabeled older eggs with newer processing and expiration dates prior to shipping the eggs to customers in California, Arizona and other states.
Quality Egg disclosed that, beginning no later than January 2006 and continuing through Aug. 12, 2010, its employees affixed labels to egg shipments that indicated false expiration dates with the intent to mislead state regulators and retail egg customers regarding the true age of the eggs.
Occasionally, Quality Egg personnel did not put any processing or corresponding expiration dates on the eggs when they were processed. The eggs would be kept in storage for several days or up to several weeks. Then, just prior to shipping the eggs, Quality Egg personnel would label the eggs with false processing dates.
In regard to the charge of introducing adulterated eggs into interstate commerce, Quality Egg admitted that, between early 2010 and around August 2010, the company sold shell eggs that were tainted with a poisonous and deleterious substance, Salmonella enteriditis. The company acknowledged that it produced, processed, held and packed the contaminated eggs in Iowa and sold and caused the distribution of the eggs to buyers in states other than Iowa.
The company also acknowledged that, on at least two occasions in 2010, its employees provided a cash bribe to a U.S. Department of Agriculture inspector, who is now deceased, in an attempt to convince the inspector to release pallets of eggs for sale that were flagged for failing to meet minimum USDA quality grade standards.
According to the statement, Quality Egg faces, for all counts, a sentence of probation for at least one year and up to five years. It faces up to $500,000 for each count of bribery and misbranding and a fine of up to $100,000 for each count of introducing adulterated eggs into interstate commerce.
Jack and Peter DeCoster each face a maximum sentence of up to one year imprisonment or a term of probation of not more than five years; a fine equal to the greater of twice the gross gain or the gross loss resulting from the offense, or $100,000, and a term of supervised release after any imprisonment for up to one year.