ASSISTANT ATTORNEY GENRAL DELERY SPEAKS AT PCA PEN AND PAD

FROM: U.S. DEPARTMENT OF JUSTICE
Principal Deputy Assistant Attorney General Stuart F. Delery Speaks at the PCA Pen and Pad
Washington, D.C. ~ Thursday, February 21, 2013

Good morning. I am joined today by Michael J. Moore, the United States Attorney for the Middle District of Georgia, Adam Lee, FBI Section Chief, Public Corruption and Civil Rights, and John Roth, Director of the FDA’s Office of Criminal Investigations, to announce a major step in this Administration’s efforts to fight fraud and protect the safety of America’s food supply.

As the head of the Justice Department’s Civil Division, I oversee the Consumer Protection Branch, which is responsible for enforcing the Food, Drug, and Cosmetic Act. Under the FDCA, it is illegal to introduce into our markets a food or drug that is adulterated – which, for foods, generally can mean either that the product is tainted or that it was produced or handled in insanitary conditions. As a result, the FDCA is a powerful tool for protecting the health and safety of all Americans. Using the FDCA, the Department has worked to prevent adulterated products from reaching consumers by securing injunctions that ban companies from distributing food or drugs until they have cleaned up their facilities. And, when adulterated products do reach the market and pose a significant danger to the public, we will not hesitate to bring criminal cases that seek to hold wrongdoers accountable and deter other would-be violators.

We are here to announce that the federal district court for the Middle District of Georgia has unsealed a 76-count indictment charging a number of former executives and employees of the Peanut Corporation of America with mail fraud, wire fraud, violations of the Food, Drug, and Cosmetic Act, obstruction of justice, and conspiracy to commit mail and wire fraud. As charged in the indictment, three of the defendants—Stewart Parnell, Michael Parnell, and Samuel Lightsey, engaged in multiple schemes to defraud the company’s customers and mislead those customers as to the presence of salmonella in PCA peanut products. In addition, Stewart Parnell, Samuel Lightsey, and former PCA employee Mary Wilkerson have been charged with obstruction of justice.

In addition to this indictment, the court also unsealed an Information containing criminal charges against former PCA executive Daniel Kilgore. Mr. Kilgore has pleaded guilty to that Information, which charged him with the same conspiracy to commit fraud, violations of the Food, Drug, and Cosmetic Act, and other crimes.

Many of you may recall the national outbreak of salmonella that took place in 2008 and 2009. The indictment we are announcing today arises out of a criminal investigation launched after PCA’s Blakely, Georgia peanut processing plant was identified as a likely source for that outbreak. As charged in the indictment, PCA produced peanuts at its Blakely plant under insanitary conditions, which included PCA’s failure to follow appropriate practices to ensure its plants were sanitary, its failure to prevent cross-contamination between raw and cooked product, and its failure to take adequate steps to keep rodents and insects out of the plant.

These products were sold to food producers around the country. PCA peanut products ended up in many foods eaten by Americans every day.

As alleged in the indictment, three of the defendants — Stewart Parnell, Michael Parnell, and Samuel Lightsey — engaged in a multi-year conspiracy to hide the fact that many of PCA’s products were tainted with salmonella. The indictment charges that these PCA officials affirmatively lied to their customers about the presence of salmonella in PCA’s products, failing to reveal to their customers when PCA’s testing by independent labs revealed salmonella in products being shipped from PCA’s Blakely plant on a regular basis. As alleged in the indictment, some PCA officials went so far as to fabricate the Certificates of Analysis that its customers relied on. As charged in the indictment, although the Certificates of Analysis which accompany shipments of peanut products were supposed to summarize laboratory results, some PCA officials prepared Certificates stating that PCA products were free of salmonella even when tests showed the presence of salmonella or when no tests had been done at all.

According to the indictment, some of these officials continued to violate the law through the beginning of the investigation of the 2009 outbreak. FDA inspectors visited PCA’s plant several times in January 2009 to try to get to the bottom of the outbreak. As noted in the indictment, FDA inspectors asked specific questions about the plant, its operations, and its history. However, as alleged in the indictment, some of the defendants gave untrue or misleading answers to these questions, again hiding the known presence of salmonella in PCA’s peanut products.

When food or drug manufacturers lie and cut corners, they put all of us at risk. The Department of Justice will not hesitate to pursue any person whose criminal conduct risks the safety of Americans who have done nothing more than eat a peanut butter and jelly sandwich. Like the FDA, we pay close attention to food safety matters, and we are committed to using every tool at our disposal to protect Americans from unsafe foods.

I want to thank our partners at the United States Attorney’s Office, the FBI, and the FDA for their superb work in this investigation. Our partnership is a shining example of good government, and led directly to the culmination of the investigation which is being announced today.

And now it is my pleasure to introduce the United States Attorney for the Middle District of Georgia, Michael Moore.