The founder of Midamar, an export company charged with fraud for sending “halal” meat to Malaysia that failed to meet halal slaughtering standards, has reportedly been sentenced to two years in federal prison and ordered to pay $60,000 in fines and $184,983 in disgorgement. Midamar was fined $20,000 and ordered to forfeit $600,000. A U.S. Department of Agriculture investigation revealed that William Aossey, Jr. instructed his employees at Midamar to change the application forms to indicate the meat had been produced at a Malaysia-approved facility instead of Midamar’s unapproved supplier. Aossey was convicted of making false statements on export applications, selling misbranded meat and committing wire and mail fraud in July 2015. The court cited Aossey’s advanced age and lack of criminal history to lower his sentence from the guideline sentencing range of 87-108 months. Aossey’s sons, Jalel and Yahya, have also been convicted of similar charges and will be…
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Two cheese companies and an executive from a third company have pleaded guilty to charges relating to the manufacture and sale of adulterated and misbranded Parmesan cheese products. The companies, Universal Cheese & Drying, Inc. and International Packing, LLC, were charged with conspiracy to introduce misbranded cheese products into interstate commerce and to commit money laundering, while Michelle Myrter, an executive at Castle Cheese Co., pleaded guilty to a misdemeanor count of aiding and abetting the introduction of misbranded cheese. “The Department of Justice prosecutes people and companies who introduce adulterated or misbranded food into interstate commerce,” U.S. Attorney David Hickton said in a February 26, 2016, press release. “In this case, the fraud was perpetrated on consumers who purchased Parmesan and Romano cheeses that were inferior to what they believed they were buying.” Additional details about the Castle case and the ensuing media attention about the cellulose content in…
A consumer has filed a lawsuit against Kraft Heinz Foods Co. alleging the company sells its grated Parmesan as “100% Grated Parmesan Cheese” despite containing “significant amounts of adulterants and fillers,” including cellulose, or “wood pulp.” Lewin v. Kraft Heinz Foods Co., No. 16-0823 (N.D. Cal., filed February 18, 2016). The lawsuit comes in the wake of a Bloomberg Business article investigating the content of several leading companies’ grated-Parmesan products. The plaintiff alleges that the 3.8 percent of the product composed of cellulose precludes Kraft from labeling its cheese as “100% Grated Parmesan.” For allegations of misrepresentation, fraud and violations of California’s consumer-protection statutes, the plaintiff seeks class certification, damages and an injunction. For its investigation, Bloomberg hired a laboratory to test grated-Parmesan products for levels of cellulose, an additive often described as “wood pulp” approved for use in food in amounts up to 4 percent. The tests apparently found higher…
A Delaware cheese company and two individual defendants have pled guilty to a misdemeanor violation of the federal Food, Drug, and Cosmetic Act for distributing adulterated ricotta, queso fresco and fresh cheese curds in several neighboring states. U.S. v. Roos Foods, Inc., No. 16-0013 (D. Del., information filed January 22, 2016). Roos’ cheese was connected to a 2014 outbreak of Listeria that caused five adults and three newborns to contract listeriosis. The criminal information alleged the company produced the cheese in unsanitary conditions, including the “[f]ailure to clean food-contact surfaces as frequently as necessary to protect against contamination of food” and “failure to store raw materials or ingredients in a manner that protects against contamination.” In their agreement with the U.S. Food and Drug Administration (FDA), the defendants agreed to an injunction preventing them from processing or distributing food products until they undergo an FDA inspection and facility testing by…
The Centers for Disease Control and Prevention has declared that two E. coli outbreaks linked to Chipotle Mexican Grill Inc. “appear to be over,” but the agency has not identified a food source for the outbreaks. “The epidemiologic evidence collected during this investigation suggested that a common meal item or ingredient served at Chipotle Mexican Grill restaurants was a likely source of both outbreaks,” the agency said. “When a restaurant serves foods with several ingredients that are mixed or cooked together and then used in multiple menu items, it can be more difficult for epidemiologic studies to identity [sic] the specific ingredient that is contaminated.” Meanwhile, Chipotle faces a joint investigation by the U.S. Food and Drug Administration and U.S. Department of Justice into a 2015 norovirus outbreak in one of its California restaurants. The company has reportedly been served an additional subpoena requiring it to produce documents on company-wide…
A Delaware cheese company and two individual defendants have pled guilty to a misdemeanor violation of the federal Food, Drug, and Cosmetic Act for distributing adulterated ricotta, queso fresco and fresh cheese curds in several neighboring states. U.S. v. Roos Foods, Inc., No. 16-0013 (D. Del., information filed January 22, 2016). Roos’ cheese was connected to a 2014 outbreak of Listeria that caused five adults and three newborns to contract listeriosis. The criminal information alleged the company produced the cheese in unsanitary conditions, including the “[f]ailure to clean food-contact surfaces as frequently as necessary to protect against contamination of food” and “failure to store raw materials or ingredients in a manner that protects against contamination.” In their agreement with the U.S. Food and Drug Administration (FDA), the defendants agreed to an injunction preventing them from processing or distributing food products until they undergo an FDA inspection and facility testing by…
The U.S. Department of Justice (DOJ) has intervened in an ongoing series of lawsuits against Tri-Union Seafoods, StarKist and Bumble Bee Foods alleging the companies conspired to set prices for tuna in the United States. In re Packaged Seafood Prods. Antitrust Litig., 15-2670 (S.D. Cal., order entered January 20, 2015). A California federal court granted the government’s unopposed motion to intervene at a status conference with attorneys representing several consumer and competitor plaintiffs in the consolidated action. The court found “common questions of law and fact between this civil action and an ongoing criminal grand jury investigation” conducted by the DOJ and accordingly granted a stay in the case. Details about the consolidation appear in Issue 588 of this Update and additional information on lawsuits brought by grocers appears in Issues 574 and 590. Issue 591
Baltimore City Councilman Nick Mosby (D) has introduced legislation that would require health warnings for sugar-sweetened beverages (SSBs) in certain advertisements, menus, menu boards and point-of-sale signage. “The beverage industry specifically targets youth and communities of color with its marketing efforts, spending $395 million in marketing directed at youth and $28.6 million on marketing campaigns specifically targeting African-American and Hispanic youth,” according to Council Bill 16-0617. The draft ordinance further asserts, among other things, that some 25 percent of school-age Baltimore City children drink one or more soda daily. The proposed health notice would state: “Warning: Drinking beverages with added sugar contributes to tooth decay, obesity, and diabetes. This message is from the Baltimore City Health Department.” Violators of the ordinance would face misdemeanor fines as high as $1,000. The proposal has been referred to the Department of Health. See The Baltimore Sun, January 11, 2016. Issue 590
Chipotle Mexican Grill has reportedly been served with a grand jury subpoena as part of a U.S. Attorney’s Office and Food and Drug Administration criminal investigation into a California norovirus outbreak in August 2015 that sickened more than 200 people. The company’s fare was also linked to a norovirus outbreak in Massachusetts in December 2015. Chipotle’s food safety practices face additional scrutiny over an ongoing E. coli outbreak that has resulted in the closure of 43 Chipotle locations in Washington and Oregon and reports of related illnesses in several other states. See The New York Times, January 6, 2016. In a January 6 Form 8-K filing with the U.S. Securities and Exchange Commission, Chipotle reported a 14.6 percent drop in fourth quarter 2015 sales and non-recurring expenses related to its foodborne illness incidents of $14 to $16 million. Meanwhile, Pomerantz LLP announced on January 8 that it has filed a…
The U.S. Court of Appeals for the Second Circuit had upheld the conviction of a man who sold $20 million worth of counterfeit wine by mixing lower-priced wines and pouring them into the bottles of more expensive wines. USA v. Kurniawan, No. 14-2928 (2nd Cir., order entered December 22, 2015). The man challenged the search of his home on Fourth Amendment grounds, arguing that the evidence police found should have been inadmissible. The appeals court disagreed, finding that although the warrantless protective sweep had been illegal, the police affidavit provided enough additional evidence beyond what was found during the protective sweep to support issuing the warrant. Accordingly, the court affirmed a lower court’s judgment that the man must serve 10 years in prison and pay $28 million in restitution along with $20 million in forfeiture. Issue 589
