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DeCosters agree to $7 million in fines, forfeitures for alleged egg violations

Fines, possible jail time to be decided by judge

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The owners of an Iowa egg company blamed for a 2010 Salmonella outbreak have agreed to pay $7 million in fines and forfeitures as part of a federal criminal case scheduled for hearing Tuesday.

Austin “Jack” DeCoster, 79, and Peter DeCoster, 50, were charged last month with introducing adulterated food into interstate commerce, a misdemeanor punishable by up to one year in jail.

Their company, Quality Egg, faces the misdemeanor charge, as well as felonies that include bribing a public official and introducing misbranded food into interstate commerce with intent to defraud or mislead.

Documents filed Monday in U.S. District Court show the company has agreed to pay a $6.69 million fine as part of a plea agreement. Each DeCoster would pay another $100,000 and the company faces a $10,000 forfeiture, documents state.

The men will appear in U.S. District Court in Sioux City Tuesday morning for a plea hearing. Sentencing will be set for a later date.

A judge will decide how much money the DeCosters owe and whether they will spend any time in jail or on probation. The plea agreement says the Decosters may contest jail time or other confinement on the grounds it would be unconstitutional.

A trial information filed last month in the Northern District of U.S. District Court alleges Jack and Peter DeCoster sold contaminated eggs across state lines for the first half of 2010.

The eggs “contained a poisonous and deleterious substance, that is, Salmonella Enteritidis, that may have rendered them injurious to health,” the trial information states.

More than 1,900 people across the country became ill in 2010 from Salmonella Enteritidis linked to tainted eggs supplied by Quality Egg, doing business as Wright County Egg, and Hillandale Farms, an Alden operation also managed by the DeCosters. The companies recalled 550 million eggs nationwide.

Iowa is the top egg-producing state in the nation.

The DeCosters apologized for the outbreak when they testified Sept. 22, 2010, before an oversight and investigations subcommittee of the U.S. House Committee on Energy and Commerce.

Prosecutors allege Quality Egg on at least two occasions in 2010, including April 12, 2010, offered money to a “public official with intent to influence an official act.”

On April 12, 2010, Quality Egg employees offered a USDA inspector $300 to release eggs for sale that had failed to meet federal standards, according to criminal charges filed in 2012 against Tony Wasmund, a former Quality Egg employee.

Wasmund, 63, of Willmar, Minn., pleaded guilty in September 2012 to conspiring to bribe an egg inspector. His sentencing has been rescheduled four times, leading to speculation prosecutors were using his testimony against the DeCosters.

The trial information also states Quality Egg knowingly sold eggs between Jan. 1, 2006, and Aug. 12, 2010, that were mislabeled to appear fresher than they were.

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