Mistrial declared in former Blue Bell CEO's case after jury can't reach verdict

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After four days of deliberation, jurors on Monday announced they could not unanimously decide whether to convict former Blue Bell CEO Paul Kruse on federal charges of wire fraud and conspiracy, and the case connected to the ice cream company's deadly listeria outbreak nearly a decade ago resulted in a mistrial.

Prosecutors have the option to pursue a new trial against Kruse, but a spokesperson on Monday declined to say whether they would. Of the 12-person jury, 10 jurors voted for a not guilty verdict, said Kruse's defense attorney Chris Flood.

Blue Bell suffered significant financial losses because of the listeria outbreak. The company shut down production for a time in 2015 and recalled 8 million gallons of ice cream after reports of listeria started coming in. At least 10 people fell ill and two people — patients at a Kansas hospital in 2014 — died as a result of harmful bacteria in the ice cream.

While Kruse learned of positive listeria tests in mid-February 2015, it was not until mid-March that the company communicated the danger to the public, current Blue Bell CEO Ricky Dickson testified last week. Kruse for weeks directed his subordinates to share the listeria issues with food safety regulators but not buyers.

Additionally in 2011, one sample of Blue Bell ice cream that had already been released to the public tested positive for listeria, an employee testified. When the employee brought Kruse the lab results, Kruse responded by saying, "I told you to discontinue this program."

However, the charges prosecutors pursued against Kruse dealt only with his actions in 2015, according to the federal indictment.

Directors from schools, hospitals and grocery stores across the country testified during the trial that, after Blue Bell drivers arrived to withdraw ice cream in February 2015, they sought information from top Blue Bell leadership and were not told anything about potential health issues with the products.

Kruse was concerned that if Blue Bell's customers got wind of a listeria outbreak in certain products, "they might run away from all his products," federal prosecutor Anthony Nardozzi said during closing arguments. "There's the fraud."

The charges Kruse was facing — one count of conspiracy and five counts of wire fraud — would have each carried a maximum punishment of 20 years in prison.

However, Flood contended during his closing arguments that prosecutors were overreaching in their charges. After drivers withdrew some of their ice cream from buyers, Blue Bell refunded the money.

A person guilty of wire fraud "intentionally devised or participated in a scheme to defraud another out of money," according to federal law.

"I want to thank the jurors for all their hard work," Flood said Monday. "It was clear to a lot of them that Paul Kruse never intended to cheat Blue Bell’s customers out of money. They believed that Paul Kruse was doing the best he could with the information he had at the time."

As Blue Bell worked with federal regulators, agents noted that the company seemed reluctant to issue a formal recall or put out a public statement about listeria. However, Flood noted that state and federal agencies also waited till mid-March to alert the public.

More:Blue Bell hit with $17M penalty for listeria outbreak

A Texas Department of State Health Services official wrote in a Feb. 26, 2015, email that "Blue Bell is now hesitant to issue a public recall notice" because doing so would "not be in their best interest" and "they feel the risk to the public is minimal" and "they are not aware of any illnesses." Prosecutors presented the email in court last week.

Blue Bell already pleaded guilty in 2020 to two misdemeanor counts of distributing adulterated ice cream products, and Austin-based U.S. District Judge Robert Pitman — who presided over this month's trial against Kruse — ordered Blue Bell to pay $17.25 million in criminal penalties as a result.

In 2018, the state of Texas said it had completed an enforcement agreement with Blue Bell that allowed operations to resume under expanded monitoring. During the 2015 shutdown, Blue Bell deep-cleaned its plants in Brenham, which is about 90 miles east of Austin; Sylacauga, Ala.; and Broken Arrow, Okla. It also replaced some equipment, reworked procedures and laid off hundreds of workers.

Blue Bell said in a statement that "this trial is between the United States government and Mr. Kruse" and "we are a different and better Blue Bell today."

"We understand that the jury was unable to reach a unanimous verdict, and the government will make a decision on its next steps," the statement said. "Blue Bell has learned from this difficult chapter in our company’s history, and food safety will continue to be our highest priority."

This article originally appeared on Austin American-Statesman: Mistrial declared in former Blue Bell CEO's case after deadlocked jury