Federal court expected to dismiss charges against former Blue Bell CEO | Food Safety News


Felony charges lodged against former Blue Bell Creameries CEO Paul Kruse on May 1 are all but certain to be dismissed for lack of subject matter jurisdiction. The dismissal could occur at the next motion hearing in the case, which is scheduled for 2 p.m. on July 29, or U.S. District Judge Robert Pitman could act sooner.

Dismissal of the conspiracy and wire fraud charges became likely when the Department of Justice filed a response brief to a defense motion for dismissal. In their response, DOJ attorneys conceded the current charges “should be dismissed.”

The DOJ trial attorneys, Patrick Hearn and Matthew J. Lash, say the felony criminal information against Kruse was “properly instituted” on May 1 “amidst the exigent circumstances of a global pandemic that precluded convening a grand jury.”

It is because Kruse never gave up his right to be indicted by a grand jury that even the DOJ attorneys now admit the charges should be dismissed.

There’s likely to be a dispute about what happens after dismissal.

Re-filing the charges against Kruse with the grand jury for indictments may run up against the 5-year statute of limitations. And there may be “tolling” issues for when clocks were stopped because grand juries were not working.

While DOJ favors the dismissal motion, the government attorneys said it will trigger “a tolling period” for the government to seek a grand jury indictment “even if the statute has expired.”

Defense attorneys Chris Flood and John D.Cline say DOJ is getting way ahead of itself by raising issues “not now before the court.” They say the purported charges against Kruse all involve a five-year statute of limitations.

“If and when the government persuades a grand jury to return an indictment, we will file a motion to dismiss on statute of limitations grounds, which we will explain in detail the errors in the government’s argument,” Flood and Cline wrote. “Until a grand jury returns an indictment, however, the statute of limitations is not ripe, and the Court lacks jurisdiction to provide the advisory opinion the government seeks.

The DOJ did have a tolling agreement with Kruse to stop the clock on the statute of limitations issues. It ran from Jan. 21 to February this year, just prior to the pandemic becoming an issue.

Kruse retired from Blue Bell Creameries three years ago. His long tenure in running the iconic ice cream company included 2015 when the company was challenged by listeria in its plant and products. Blue Bell’s problems included it being linked to an outbreak of 10 listeriosis illnesses and three deaths.

While the federal felonies were brought on May 1, he did not enter a not guilty plea on the charges until June 8. Kruse did waive his rights to personally appear for arraignment, his not guilty plea, and to obtain copies of all charging documents. Under its emergency COVID-19 rules, the federal court in Austin continues to conduct as much business as possible without courtroom gatherings.

Kruse is free on an appearance bond he signed promising to be in court whenever he’s called.

The felony charges brought against Kruse are for conspiracy and wire fraud. For each of the seven counts, Kruse could face up to 20 years in prison and $250,000 fines. Six counts charge him with wire fraud. The seventh is for conspiracy.

Separately from the felonies facing Kruse personally, Blue Bell as a corporation entered guilty pleas on May 1 to two federal misdemeanor charges that the company shipped contaminated ice cream across state lines during the 2015 outbreak. Blue Bell agreed to pay $19.35 million, the second-highest monetary penalty in history for food safety violations.

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