White Collar Criminal Defense Group

Former Peanut Company President And Two Others Sentenced For Roles In Salmonella-Tainted Product Outbreak

On Monday, two former officials and one broker for the now defunct Peanut Corporation of America (“PCA”) were sentenced by Senior U.S. District Judge W. Lewis Sands of the Middle District of Georgia for their roles in a conspiracy to defraud customers by shipping salmonella-positive peanut products.  Stewart Parnell, the former owner and president of PCA, was sentenced to serve 336 months (28 years) in prison.  Michael Parnell, a food broker who worked on behalf of PCA and is Stewart Parnell’s brother, was sentenced to 240 months, and Mary Wilkerson, who held various positions at PCA, including quality assurance manager, was sentenced to serve 60 months.  Judge Sands indicated that he will issue a restitution order at a later date.

The Parnell brothers were convicted by a federal jury on September 19, 2014, of multiple counts of conspiracy, mail and wire fraud and the sale of misbranded food.  Stewart Parnell was also convicted of the introduction of adulterated food into interstate commerce.  Stewart Parnell and Mary Wilkerson were also convicted of obstruction of justice.

Expert evidence at trial showed that tainted food led to a salmonella outbreak in 2009 with more than 700 reported cases of salmonella poisoning in 46 states.  The Centers for Disease Control and Prevention (“CDC”), estimated that, based on epidemiological projections, that number translates to more than 22,000 total cases including 9 deaths.  Judge Sands found at the time of sentencing that steps taken by the CDC to link reported illness to the specific strain of salmonella found in PCA products established that Stewart and Michael Parnell’s conduct was the proximate cause of the victims’ illnesses.

According to the government, evidence presented at trial established that Stewart and Michael Parnell, along with others, participated in several schemes by which they defrauded PCA customers and jeopardized the quality and purity of their peanut products.  Specifically, the government presented evidence that, on several occasions, the Parnells and others participated in a scheme to fabricate Certificates of Analysis (COAs) that stated that the food at issue was free of pathogens when in fact there had been no testing of the food or tests performed had actually revealed the presence of pathogens.

According to a report on the sentencing hearings by USA Today, the proceedings lasted the entire day and featured impassioned pleas for severe punishment from families of victims killed or injured by the salmonella outbreak, counterpointed with requests for leniency from relatives and supporters of defendants.  Addressing the court in his own behalf, Stewart Parnell apologized to victims and their families. 

In an interview with USA Today prior to the sentencing, Parnell’s attorney indicated that the potential life sentence at issue prior to the hearing, was “absurd.”  He added that the recommendation in this regard by the U.S. Probation Office was based on speculative losses, and questioned whether medical evidence had substantiated the victim count.  According to the USA Today, he added, “the truth of the matter is Stewart Parnell ate the peanut butter; he fed it to his children and fed it to his grandchildren; he never intended to harm anyone.”

Although restitution was put off to a later ruling, Judge Sands did write in his judgment of sentence in each case that Stewart Parnell and Wilkerson should bear responsibility for just under $200 million in losses and that Michael Parnell should bear responsibility for just under $50 million in losses.  According to the USA Today, Judge Sands calculated Stewart Parnell’s potential maximum sentence at 803 years in prison, but imposed a lesser, but still severe punishment after telling courtroom participants and spectators that “this is not a murder case.”

DOJ claims that Stewart Parnell’s sentence is the largest criminal sentence ever imposed in a food safety case.  Two other defendants in the case, former PCA plant processing manager Samuel Lightsey and operations manager Daniel Kilgore, entered pleas of guilty prior to trial in exchange for favorable sentencing recommendations or concessions by the government.  Lightsey and Kilgore are scheduled to be sentenced by Judge Sands on October 1.

Chicago Area Medical Biller Sentenced To 45 Months For Role In $4 Million Home Healthcare Fraud Scheme

On Friday, September 18, the medical biller for a Chicago-area visiting physician practice was sentenced to 45 months in prison, by U.S. District Judge Gary Feinerman of the Northern District of Illinois, for her role in a $4 million healthcare fraud scheme.  Mary Talaga was convicted in May of this year following a jury trial on numerous charges relating to a billing scheme, including conspiracy to commit healthcare fraud.  Ms. Talaga was also sentenced to pay approximately $1 million in restitution.

From 2007-2011, Talaga was the primary medical biller for Medicall Physicians Group, Ltd., a physician practice that visited patients in their home and prescribed home healthcare.  The primary method of billing fraud that came to light at trial was the billing of Medicare for a service known as “Care Plan Oversight” or “CPO,” which would have indicated that the doctors had provided oversight of patient care plans.  In fact, the doctors at Medicall rarely provided the service. 

Talaga and her co-conspirators also billed Medicare for other services that were never provided, including services rendered to patients who were deceased, services purportedly provided by medical professionals no longer employed by Medicall and services purportedly provided by medical professionals who, based on billing records would have had to have worked over 24 hours per day.  In all, the evidence presented at trial indicated that, through the period of the 5-year conspiracy, Medicall submitted bills to Medicare for more than $4 million in services never provided and Medicare paid more than $1 million on those claims.

Talaga’s co-conspirators, Rick Brown and Roger A. Lucero, Medicall’s former medical director, were also convicted in this matter.  Brown was convicted as part of the same trial with Talaga, and has been sentenced to serve more than 7 years in prison.  Lucero pleaded guilty and will be sentenced at a later date.

According to the government, since its inception in March 2007, the Medicare Fraud Strike Force, which investigated and prosecuted this case, has charged over 2,300 defendants who collectively have billed the Medicare program for over $7 billion.