IOWA CITY, Iowa – Lawyers representing a disgraced egg industry magnate from Maine, his son and one of their company’s financial officers say their clients are potential targets of a criminal investigation into the salmonella outbreak in 2010 that sickened thousands of Americans and led to a massive recall of their products.

In recent documents filed in a civil case in California, defense lawyers for Austin “Jack” DeCoster, his son Peter DeCoster and Quality Egg Chief Financial Officer Patsy Larson say a federal grand jury has been meeting in Iowa to determine whether fraud or other crimes were committed in the production and testing of eggs.

Federal officials say at least 1,900 people — and likely thousands more — got sick during the outbreak that started in July 2010 and was later linked to contaminated eggs supplied by Quality Egg and Hillandale Farms. Both companies voluntarily recalled 550 million eggs nationwide.

Regulators put most of the blame on Quality Egg, which did business as Wright County Egg, based in Galt, Iowa. Quality Egg, controlled by the DeCosters, sold chickens and feed to Hillandale and had more illnesses linked to its eggs. Inspectors discovered dead chickens, insects, rodents, towers of manure and other filthy conditions at both farms, and a congressional investigation found salmonella samples more than 400 times from 2008 to 2010.

Jack DeCoster, now in his late 70s, started building his egg production empire as a teenager in Maine. He became one of the nation’s largest producers, even as his operations were cited for immigration, safety, environmental and labor violations.

Peter DeCoster ran many of his companies’ day-to-day operations. The DeCosters said last year that they have given up control of their egg operations in Iowa, Ohio and Maine.

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The details of the ongoing criminal probe were filed as part of a lawsuit brought by NuCal Foods, a California cooperative that bought some of the tainted eggs. The lawsuit alleges that Jack DeCoster and his companies knew that chicken houses and carcasses were contaminated with salmonella in the months before the outbreak, based on their own testing, and withheld that information from regulators and consumers and continued selling the eggs.

Citing the investigation, lawyers for the DeCosters and Larson said they would invoke their constitutional rights against self-incrimination if forced to testify. Last week, a magistrate judge put the testimony of Quality Egg on hold because those three key employees “are currently the target of a federal criminal investigation.”

A Des Moines lawyer, Jan Kramer, said in a court filing that she and her partner have been retained to represent Jack DeCoster in the grand jury probe, of which he is “presently a target.”

She said the case has been ongoing since Food and Drug Administration agents searched Quality Egg and DeCoster’s offices in Galt on Aug. 31, 2010, seizing documents related to the contamination of shell eggs.

R. Scott Rhinehart, a defense lawyer based in Sioux City, said in a letter dated May 11 that his firm has been retained to represent Larson, who has been subpoenaed to appear before the grand jury next week. He said he has been informed by prosecutors that “Patsy is a potential target in this investigation.”

West Des Moines lawyer F. Montgomery Brown said in a letter dated May 3 that he has been retained to represent Peter DeCoster. He said his contact with prosecutors shows his client is “at minimum a subject” of the investigation.

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At the time of the salmonella outbreak in July 2010, Jack DeCoster owned Quality Egg of New England, which operated egg farms in Turner and Leeds.

Those operations were not implicated in the salmonella outbreak, according to Maine state veterinarian Don Hoenig.

In September 2010, The Associated Press quoted DeCoster as telling a congressional committee that “We were horrified to learn that our eggs (produced in Iowa) may have made people sick.”

“We apologize to everyone who may have been sickened by eating our eggs. I pray several times each day for all of them and for their improved health,” DeCoster said.

The DeCosters are not strangers to controversy.

In April 2009, what was then the DeCoster Egg Farm in Turner made headlines over a video documenting mistreatment of hens. DeCoster ended up paying $25,000 in penalties, and a one-time payment of $100,000 to the Maine Department of Agriculture over animal cruelty allegations.

In 2002, the federal Equal Employment Opportunity Commission announced a settlement totaling more than $1.5 million on behalf of Mexican women who said they were subjected to sexual harassment, including rape, abuse and retaliation, by some supervisors at DeCoster’s Iowa plants.

In 1997, DeCoster Egg Farms agreed to pay $2 million in fines to settle citations from the prior year for health and safety violations at its farm in Turner. At the time, Robert Reich, the federal labor secretary, said conditions were “as dangerous and oppressive as any sweatshop.”

 


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