Quality Egg executives plead guilty to food safety scam
June 4, 2014
by Keith Nunes
SIOUX CITY, IOWA — Austin “Jack” DeCoster and Peter DeCoster, both former executives with egg processor Quality Egg L.L.C., pleaded guilty June 3 in federal court in connection with the distribution of adulterated eggs in interstate commerce. Quality Egg was at the center of a Salmonella enteriditis outbreak in 2010 that prompted the recall of more than 500 million eggs.
As part of their plea agreements, the company and the two executives admitted the shell eggs distributed by the company were adulterated. In addition, Quality Egg acknowledged that, on at least two occasions in 2010, its employees gave a cash bribe to a U.S. Department of Agriculture inspector. The inspector’s job included inspecting shell eggs at one or more of Quality Egg’s production plants in Iowa. Quality Egg admitted its employees provided the bribe to the inspector, who is now deceased, for the release of pallets of retained eggs for sale without re-processing as required by law. The eggs had been retained for failing to meet minimum U.S.D.A. quality grade standards.
Quality Egg also pleaded guilty to introducing misbranded eggs into interstate commerce with the intent to defraud. As part of its plea agreement, Quality Egg admitted that, beginning around January 2006 and continuing through August 12, 2010, its employees labeled 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.
Quality Egg acknowledged there were a number of ways the company mislabeled older eggs with newer processing and expiration dates prior to shipping the eggs to customers in California, Arizona and other states. Sometimes 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 labeled the eggs with processing dates that were false.
As part of his plea agreement, Austin DeCoster admitted he was the trustee of the trust that owned Quality Egg and he exercised substantial control over the operation of the business and related entities and assets in Iowa. He acknowledged that he was the person ultimately responsible for the operations of Quality Egg and the various egg plants in Iowa associated with Quality Egg.
Peter DeCoster admitted he was the chief operating officer of Quality Egg, and he exercised some control over the production and distribution of shell eggs by Quality Egg and related entities and assets in Iowa.
Both men face a maximum sentence of up to one year in prison 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. A sentencing date has not been set by the court.