Profits Over Safety
Egg Company’s Fraudulent Practices Put Public at Risk
The 81-year-old owner of an Iowa egg production company and his son, a top executive in the business, are going to prison for bribing a federal food inspector and distributing eggs that contained Salmonella bacteria, which caused hundreds of consumers to become sick.
A federal judge in Iowa last month ordered the Quality Egg company to pay a $6.79 million fine and sentenced company owner Austin “Jack” DeCoster, and his son, Peter DeCoster, who was Quality Egg’s chief operating officer, to serve time in prison.
During the spring and summer of 2010, adulterated eggs produced and distributed by Quality Egg were linked to nearly 2,000 consumer illnesses in a nationwide outbreak of salmonellosis that led to the recall of millions of eggs produced by the defendants.
“This was a classic case of putting profits over public safety,” said Special Agent Grant Permenter, who helped investigate the case from the FBI’s Omaha Division.
Quality Egg pled guilty to bribing an inspector of the U.S. Department of Agriculture (USDA) to release eggs that had been retained for quality issues. The eggs had been “red tagged” for failing to meet minimum USDA quality grade standards. The company also pled guilty to introducing misbranded eggs into interstate commerce with the intent to defraud. From approximately 2006 until 2010, Quality Egg 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.
In the government’s sentencing memorandum prepared for the court, it was noted that Quality Egg personnel had for years disregarded food safety standards and misled customers about the company’s food safety practices.
“As with a lot of fraud cases,” Permenter said, “Quality Egg’s crimes were committed over and over for years, and, eventually, these illegal practices caught up with them.” But this case was not just about deception, he said. “People got sick. There was a serious public safety issue here. Quality Egg’s business practices put the public at risk—at times, substantial risk.”
Permenter explained that the FBI assisted in the investigation led by the USDA’s Office of Inspector General and the Food and Drug Administration’s Office of Criminal Investigations. He added that the USDA inspector who received bribes from Quality Egg was in ill health and died before he could be charged. “The inspector was a federal employee. Had he lived,” Permenter said, “he would have been charged and, in all likelihood, would have gone to jail as well.”
In June 2014, Quality Egg and Jack and Peter DeCoster pled guilty to bribery and other charges related to adulterated egg distribution.
In the end, Permenter said, “it seems obvious that company profits outweighed other concerns.” By being able to circumvent the inspection process through bribes and not having to remove the tainted eggs from its inventory, the company saved a significant amount of money. “When you start bending your ethical and moral fibers because there are dollar signs in front of you,” he said, “a lot of bad things are likely to happen.”