021: Blue Bell Ice Cream’s Fraud and Conspiracy from Improper Disclosure

Situation

Paul Kruse, the president of Blue Bell Ice Cream, found himself in a quandary as he tried to get his hands around a potential quality control issue at the company. 

He knew the problem could be dangerous to people‚Äôs health but would also cause the company a significant financial loss and reputational damage if they publicly disclosed the problem. Instead, he instructed employees around the country to pull the products from shelves, without explanation, hoping the problem had been contained to just that small batch. That turned out not to be the case, risking the lives of many consumers by failing to disclose the problem and alert the public. 

The government brought criminal charges against Mr. Kruse due to his neglect and deceitful thinking. The charges included numerous counts of wire fraud and conspiracy for his attempt to cover up the impure ice cream products that infected hundreds of customers.