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Lawyers: Criminal probe targets egg magnate, aides

IOWA CITY, Iowa Lawyers representing a disgraced egg industry magnate, his son and one of their
company's financial officers say their clients are potential targets of a criminal investigation into the
2010 salmonella outbreak that sickened thousands of Americans and led to a massive recall of their
In recent documents filed in a civil case in California, defense lawyers for Austin "Jack" DeCoster,
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 fell ill and likely thousands more 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 between 2008 and 2010.
Peter Deegan, a spokesman for the U.S. Attorney's Office for the Northern District of Iowa, based in
Cedar Rapids, said Wednesday he could not confirm the existence of the investigation. The office's
jurisdiction covers the rural area of northern Iowa where the farms are located.
The details of the ongoing criminal probe were filed as part of a civil lawsuit brought by NuCal
Foods, a California cooperative that bought some of the tainted eggs. The lawsuit alleges 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, but kept 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."
Des Moines lawyer Jan Kramer said in a court filing that she and her criminal law attorneys 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 executed a
search warrant at Quality Egg and DeCoster's offices in Galt on Aug. 31, 2010, seizing documents
related to the contamination of shell eggs.
Several current and former officers and employees of Quality Egg have already testified, she wrote,
including University of Georgia avian medicine expert Charles Hofacre, who helped develop its
salmonella prevention program, and farm manager Tony Wasmund.
"We would fully expect that once the investigation is completed, there will be no charges brought.
But if there are, we will defend. We're aware of nothing they have done that would warrant any kind

of a charge," Kramer said in a phone interview Wednesday.

R. Scott Rhinehart, a defense lawyer based in Sioux City, said in a May 11 letter 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
West Des Moines lawyer F. Montgomery Brown said in a May 3 letter 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 understood as 'fraud' relating to the production and testing of eggs" at
Hillandale Farms and Wright County Egg.
Brown said Wednesday his client has not been asked to testify in front of the grand jury, but denies
criminal wrongdoing.
"Peter DeCoster denies any company he had involvement with knowingly transmitted (salmonella)
contaminated eggs into the stream of commerce," he said.
Rhinehart did not immediately return a message.
DeCoster, now in his late 70s, started building his vast 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. His son, Peter, ran many of his companies'
day-to-day operations. The DeCosters said last year they have given up control of their egg
operations in Iowa, Ohio and Maine.
Court documents filed by NuCal indicate what testimony grand jurors may have heard from Hofacre
and Wasmund. Hofacre recommended a detailed plan of action to combat the presence of salmonella
on the farms in May 2010, warning company officials in an email: "We have to get this level of SE
(Salmonella Enteritidis, the bacteria linked to the outbreak) knocked down!"
Wasmund had earlier submitted several samples from a hatchery that supplied chickens to the Iowa
egg operations for testing at a University of Minnesota laboratory, which found a different type of
salmonella rampant in the facilities, according to NuCal's complaint.
Brown said salmonella is routinely present at poultry farms, and the companies did the voluntary
testing as part of their safety program.