Food Fraud and Whistleblowers

Fraud is a problem that affects many areas of our daily lives, including a part of life that is as central as almost anything else – food. Nearly all industries suffer from the consequences of fraud and those who want to avoid regulations in order to save or earn money, and the food industry is no exception. 

Perhaps the most famous food safety exposé and food industry scandal in American history was brought about and described by Upton Sinclair’s 1906 novel “The Jungle,” which exposed the unsafe and unscrupulous conditions of the meat-packing industry in America at the time. Sinclair, a young, aspiring writer and journalist of modest means spent time living among and interviewing meat-processing laborers in the Chicago stockyards. His fictional novel, based on real-life accounts, described the horrible conditions for workers and animals, including how diseased cattle were butchered and sold to American households after arriving in Chicago via train. He also brought up another prior food scandal from the Spanish-American War of 1898, where it was found that the US Army provided American soldiers with tainted meat supplies – rotted beef that was “embalmed” with formaldehyde. It was said that far more soldiers were killed by the tainted beef than by Spanish guns during the war. No charges were ever brought. Sinclair’s novel “The Jungle” eventually led to the Department of Agriculture playing a greater role in food safety and to Teddy Roosevelt’s administration passing the 1906 Federal Meat Inspection Act. Eventually, the government would go on to establish the Food and Drug Administration (FDA).

In modern times, fraud within the food industry often involves products that are mislabeled, adulterated, or counterfeited. Commonly referred to as Economically Motivated Adulterations, or EMA, these are fraudulent acts that occur when someone intentionally takes or leaves out or otherwise mislabels their food product in order to fool people into thinking it is better quality or has a greater value. This can be done by leaving out important information on their labels or substituting key ingredients for something cheaper. Whistleblowers play a vital role in exposing food fraud and protecting consumers. 

An example of a law that provides for whistleblower complaints and protection from retaliation is the FDA Food Safety Modernization Act (FSMA). Per the Act, employees who work for entities engaged in the manufacture, holding, or importation of food are protected from retaliation for reporting alleged violations of the Federal Food, Drug, and Cosmetic Act.

Examples of Food Industry Fraud

Several high-profile cases of food fraud have occurred in recent years. 

Horse Meat Scandal in Europe

In 2013, horse meat was found in ground beef sold in several European countries. The beef was sold without any proper declaration or warning that it could contain horse meat. In some cases, like in the Findus’ beef lasagna case, the tested beef was found to be composed of 60% horse meat, and some samples were found to contain even 100% horse meat. This case gained a lot of attention due to the dangers of consuming this type of meat. As a general rule, meat from animals treated with the drug phenylbutazone, such as is used on some horses, is not safe for humans to consume. In addition to the horse meat, other Findus products were found to contain undisclosed pig meat, which caused controversy within various religious groups who are not allowed to consume pork. Most of the product was sold in the United Kingdom, and Findus was forced to issue a recall. 

Chinese Melamine Baby-Milk Scandal

In 2008, it was revealed that some Chinese suppliers had been adding melamine to milk powder to falsely inflate protein levels. Melamine is a chemical compound used mostly to create plastic and flame-retardant products. Although it is not considered safe for human consumption, it has been illegally added to food in the past because of its high nitrogen content. When melamine-laced food is tested by regulatory agencies, it can appear to have a higher protein percentage than it really does. Unfortunately, melamine has negative side effects on the human body, most commonly causing kidney stones and eventually kidney damage. The unlabeled addition of melamine to milk powder in China caused harm to approximately 294,000 people, including six babies who died from kidney damage. An investigation was launched by the World Health Organization to determine how and where the melamine was added. The companies involved in the scandal were some of the largest dairy producers in China at the time. It was revealed that many of them knew and even tried to cover up the contamination. Some even had cases of babies with kidney stones traced back to them many years before the official investigation. In the end, they were forced to issue a recall. The general managers of the companies were criminally prosecuted, resulting in two executions and several instances of life imprisonment. 

Organic Food Industry

Another side of the food industry that has suffered from the effects of fraudulent acts is the organic food industry. This industry has seen tremendous growth recently. Along with this growth has come increased scrutiny and allegations of fraud. Organic food is grown without the use of synthetic pesticides or fertilizers and must meet specific standards established by the USDA National Organic Program. Because of these strict standards, organic foods typically cost more than conventionally grown foods. However, not all products labeled “organic” are truly organic. A recent study concluded that nearly one-third of all organic food sold in the United States is mislabeled. This means that consumers are paying a premium price for food that isn’t actually worth that price. It is not unheard of for organic crops to be tainted with pesticides or fertilizers from nearby non-organic farms. Because of this, one of the most important factors in determining if fraud was committed when labeling organic food is not whether pesticides or fertilizers are present in the food itself but rather if the farmers actively used them during the farming process. Even with this flexibility allowed by the regulating agencies, people still try to scam the system by mislabeling their non-organic food as organic. 

The largest case happened in 2019 when a farmer was found guilty of selling more than $142 million worth of non-organic grain used for cattle feed that was fraudulently labeled as certified organic grain. The meat from the cattle that consumed this food was then unwittingly sold as organic meat. The farmer responsible for this was sentenced to 10 years in prison, but he tragically took his own life instead of serving his sentence. The USDA is constantly working on updating its rules and regulations to detect and deter frauds like this from happening. 

Fraud in the food industry is a serious problem that threatens any healthy and stable society. There are several things that you can do to help avoid being a victim of and/or prevent food industry fraud. First, research any companies or brands that you are considering buying from. Make sure to read reviews and look for any red flags, like past offenses of fraud. Secondly, always double-check labels and ingredient lists before purchasing. If something looks off, it probably is. Lastly, if you have any suspicions about a particular product or company, report it to the proper authorities. 

While there are no whistleblower programs or laws that directly reward whistleblowers who bring forth information about food fraud, it is possible to have information about food fraud involving government contracts, where government money is lost or the terms of the contract are being violated (e.g., not delivering the promised amount of food or delivering substandard food in violation of contract terms), which would allow for the filing of a qui tam whistleblower lawsuit. Or, a whistleblower might have information about a big food corporation doing something dangerous and unknown to its food, and this could potentially be grounds for an SEC whistleblower agency submission. There is also, and as likely, the possibility of having enough information and evidence of food fraud to initiate a class action or a new mass tort against a big corporation involved in food fraud (e.g., claiming they use ingredients of a certain kind or that their food product meets certain requirements, when in fact, the product does not).  

If you have strong information and evidence about food fraud not known to the public, it is best to speak with a whistleblower attorney about your options. Whistleblowers who come forward with information about a bad actor in the food industry not only assist regulatory agencies in their jobs but also help the general public by making them aware of potential health dangers or dishonest advertising in food products.