Chipotle under criminal probe
Denver- based Chipotle Mexican Grill is under criminal investigation after more than 200 people were sickened in a norovirus outbreak at one of its California restaurants, the latest in an uptick of food- illness prosecutions thatwere once almost nonexist
The investigation, revealed in a corporate filing, is unusual because it focuses on norovirus— typically a non- deadly, 24- hour sickness — and on a single restaurant. Recent criminal investigations have targeted companies and their executives that shipped peanuts, cantaloupes, eggs and ice cream linked to serious illness and deaths across the country.
Chipotle has been rocked by a series of foodborne illness outbreaks at some of its restaurants in the past five months that allegedly sickened hundreds of people with E. coli, norovirus and salmonella.
The criminal investigation focuses on a norovirus outbreak linked to a Simi Valley, Calif., store that infected 234 people.
Fred Pritzker, a Minnesota attorney representing several victims of the Chipotle outbreaks, said federal investigators must have discovered “inside information” about negligence or the severity of illnesses. “There was something that came up that was unusual and egregious.”
Pritzker welcomed the probe. “It sounds like there is an element within the Department of Justice that says, ‘ Yes, we should be looking at these cases,’ and that is a good thing,” he said. “When executives havemore skin in the game, it’s more likely to change their behavior.”
Chipotle last month received a federal grand jury subpoena in connection with the August outbreak in Simi Valley, the company disclosed in a filing with the U. S. Securities and Exchange Commission.
Federal prosecutors and U. S. Food and Drug Administration authorities declined to comment. Specific details about the investigation, including potential charges, were not disclosed. Chipotle officials said in the filing that they intend to fully cooperate with the investigation.
Ventura County health records obtained by Food SafetyNews showthat dozens of patrons—
among them children from a nearby school — and at least 17 employees of the restaurant reported gastrointestinal illness in the days following Aug. 18. A subsequent health inspection found violations that included an employee’s cellphone placed on the food preparation tables, cooked beef held at temperatures below135 degrees, fruit flies near the soda and recycling stations, and employees that did not possess a valid food handler card.
“We believe the source was a sick employee, butwe cannot confirm that due to the timing ofwhenwewere informed,” said Doug Beach, administrative services and east county community services manager for Ventura County’s Environmental-Health Division.
Chipotle instituted a paid sick leave policy July 1, and officials have said that employees who come to work sick are in violation of company policies.
A federal criminal investigation tied to a single restaurant is unprecedented, saidWilliam Marler, a Seattlebased food safety attorney who led high- profile cases against companies such as Jack in the Box. Marler is representing customers who allegedly became sick after eating at Chipotle restaurants in Seattle, Minnesota, Boston and Simi Valley.
“There’s got to be something that’s happening that is not readily apparent,” Marler said. “A lot of times in these foodborne illness investigations, it’s not necessarilywhat brings the FBI or criminal investigators to your facility that gets you; what usually gets you is what they find when they get there.”
Chipotle’s stock shed more than 30 percent of its value after customers first reported they became ill with E. coli after eating at restaurants in Seattle.
Since the outbreaks, Chipotle has temporarily shuttered restaurants to clean them and throw out food, tightened food safety procedures and changed cooking and food preparation measures.
Still, Chipotle’s sales fell more than 16 percent nationwide, the company said early last month.
On Wednesday, Chipotle said sales have taken an even deeper dive.
Following the Boston norovirus outbreak that allegedly sickened more than 100 Boston College students in December, and word that the U. S. Centers for Disease Control was investigating five new E. coli cases that cropped up in November, comparable store sales sank 37 percent, Chipotle said in the SEC filing.
In December, comparable store sales— revenue from restaurants that have been open at least a year— were down 30 percent.
Chipotle expects to report a 14.6 percent drop in its fourth- quarter revenue and incur expenses as high as $ 16 million to cover the cost of replacing food, conducting laboratory analysis, hiring food- safety experts and preparing for legal costs. Fourth- quarter and full- year earnings will be reported Feb. 2.
Shares of Chipotle closed at $ 426.67 Wednesday, down more than 40 percent since the first E. coli cases were reported in October.
Criminal prosecution in food illnesswas nearly nonexistent until the past couple of years.
In 2014, Colorado cantaloupe farmers Eric and Ryan Jensen were sentenced to five years of probation and ordered to pay $ 150,000 to victims and their families in a first-ofitskind criminal case.
Listeria- contaminated melons from their southeastern Colorado farm killed 33 people in 2011.
Charges against the Jensens did not accuse the brothers of causing the outbreak on purpose, but with introducing adulterated food into the food supply.
Federal prosecutors can bring misdemeanor- level cases based on the distribution of contaminated food, regardless of who knew what or when they knew it. But they have rarely done so, saving their firepower for felony cases with an element of malice.
Before the Jensens, foodsafety prosecutions were unpredictable. Most cases were settled in civil court after victims or relatives sued the responsible company. Many of the settlements were kept confidential, lending no public knowledge that would improve food- safety practices.
In September, a former peanut company executive was sentenced to 28 years in prison in Georgia for his role in a 2008- 09 salmonella outbreak that killed nine people.
Federal officials had recommended life behind bars for Stewart Parnell, whose company, Peanut Corp. of America, was accused of shipping peanuts and peanut butter tomanufacturers such as Kellogg Co. even though it was aware they were contaminated.
In April, two egg producerswere sentenced to three months in jail after pleading guilty to selling salmonellacontaminated eggs from their Iowa farms. The 2010 outbreak sickened thousands of people. Prosecutors alleged Jack DeCoster and son Peter knew their eggswere at risk for the disease
In May, ConAgra Foods agreed to pay $ 11.2 million to settle federal charges that it shipped salmonellatainted Peter Pan Peanut Butter thatmade 625 people sick in 2007. Executives were not charged.
Just last week, the U. S. Department of Justice opened a criminal investigation into Blue Bell Creameries, The Wall Street Journal reported, citing unnamed sources close to the situation. Listeria contamination at one of the Texas- based ice cream maker’s plantswas linked to the deaths of three people and the illness of several others.
Patrons of a Chipotle restaurant in downtown Denver line up for lunch onWednesday.
Chipotle is under criminal investigation at one of its California restaurants. John Leyba, The Denver Post