Federal prosecutors allege Rancho owners deliberately sold sick cows and concealed evidence

08/18/2014

A federal grand jury indicted three Rancho Feeding Corporation employees last week for deliberately selling meat from cancer-afflicted cows, a criminal action that instigated a nationwide beef recall in January.

Jesse “Babe” Amaral, the 76-year-old co-owner of the Petaluma slaughterhouse and the manager of daily operations, allegedly directed his employees to slaughter cattle that had been marked unfit for human consumption by a veterinarian by carving the “USDA Condemned” stamps from the carcasses and swapping the severed heads of sick and healthy cows during inspectors’ lunch breaks. An estimated 101 condemned cows and 79 cows infected with eye cancer made their way into the market, prosecutors say.

Federal prosecutors also accused Mr. Amaral of sending ranchers fraudulent invoices, denying them payment for animals he falsely said had died or been condemned.

The indictment, filed in United States District Court in San Francisco last Thursday and unsealed Monday morning, also names Felix Sandoval Cabrera, the plant’s 55-year-old foreman and “knocker” responsible for stunning the cattle before slaughter, and Eugene Corda, 65, the yard-person responsible for receiving cows and directing them from pens to the kill floor, as conspirators in distributing adulterated and misbranded meat and in mail fraud.

Robert Singleton, Mr. Amaral’s 77-year-old co-owner, was also accused of circumventing meat inspections in a separate case that did not require a grand jury’s approval.

Mr. Singleton was responsible for purchasing cattle and acquired animals from livestock auction houses in northern California and Nevada as well as directly from ranchers. “Some of the purchased cattle exhibited signs of epithelioma, that is lumps or other abnormalities around the eye”—an indication of cancer—“and were thus less expensive than cattle that appeared completely healthy,” the charging document says.

Out in the plant’s yard, cattle were held in separate pens and moved into a designated area for antemortem inspection at the owners’ instruction. Usually, a cow that passed inspection would be immediately taken by the yard-person to the kill floor to be stunned with a bolt between the eyes, killed and inspected again. But prosecutors allege that the United States Department of Agriculture veterinarian’s stamp held no authority: Mr. Amaral told Mr. Cabrera which animals should be processed, and Mr. Cabrera in turn told the kill floor employees to carve the stamps from the carcass and process them for distribution.

At his employers’ instruction, Mr. Corda also allegedly circumvented inspection by exchanging uninspected, diseased cattle for cattle that had already passed inspection on the way to the kill floor. After Mr. Cabrera stunned a cow, he or another employee would toss the diseased head into the “gut bin” with other condemned carcasses and place heads of cows they had saved next to the sick cattle. This “switch and slaughter” occurred during inspectors’ lunch breaks when slaughter was supposed to cease, the indictment says. When inspectors returned, they had no idea the meat they were examining did not belong to the apparently healthy heads beside it.

For about 17 cattle, Mr. Amaral mailed farmers a falsified invoice claiming their cows had died or been condemned and actually charged them extra handling fees to dispose of the supposed remains, instead of compensating them based on the sale price, the charging document alleges.

For each cow that made its way around the inspection process and into freezers, drive-through burgers and dinner plates, Rancho’s owners paid their foreman a $50 bonus.

Mr. Amaral appeared in federal court Monday morning and was released on a $50,000 bond; Mr. Singleton will face a judge Friday morning. The maximum penalties for conspiracy to distribute adulterated meat are five years in prison, three years of supervised release and a $250,000 fine. If he is found guilty of mail fraud, Mr. Amaral could serve up to 20 years in prison and have to forfeit any proceeds he earned.

An internal investigation by the U.S.D.A.’s Office of Inspector General appears to be ongoing. A statement from the U.S. Attorney’s Office credited the O.I.G.’s work in establishing the prosecution’s case, but the O.I.G.’s other findings have not been made public. An email Monday afternoon to the U.S.D.A.’s Office of Communications asking for clarification was not immediately returned.

In the wake of the recall early this year, allegations emerged about the dysfunctional relationships and power dynamics within Rancho: CNN alleged an inspector had an intimate relationship with Mr. Cabrera, the foreman, and the Light reported that the veterinarian regularly deferred to the slaughterhouse management in approving suspect cattle his inspectors tagged as unhealthy. Across the country, the limited number of food safety inspectors overseeing the nation’s slaughterhouses was starkly highlighted.

In 2010 an additional inspector was placed at Rancho, funded by the 2008 Farm Bill. But two years later, the Food Safety and Inspection Service said they reassessed the need and reassigned the employee to oversee humane handling at another establishment.

The slaughterhouse, which the owners shuttered without reimbursing all their customers, was purchased by Marin Sun Farms CEO Dave Evans with the backing of a group of investors and reopened in April.