You get what you INspect, redux: Guilty plea for substituting cheapo pet food ingredients

In my classes I teach the nuclear Navy saying, you get what you INspect, not what you EXpect. In that vein, here’s an excerpt from a Justice Department press release, reported in today’s Houston Chronicle (business section):

KANSAS CITY, Mo. – The manager of a Wilbur-Ellis Company processing facility in Texas pleaded guilty in federal court today to his role in a multi-million dollar conspiracy to sell adulterated ingredients to pet food manufacturers, for which the company has already paid more than $4.5 million in restitution.

William Douglas Haning, 48, pleaded guilty before U.S. Chief District Judge Rodney Sippel in the Eastern District of Missouri to one count of conspiracy to introduce adulterated and/or misbranded food into interstate commerce and one count of money laundering.

“For years, William Douglas Haning orchestrated a scheme similar to charging filet mignon prices for ground beef. He unjustly lined his own pockets at the expense of unsuspecting consumers,” said Acting Special Agent in Charge Alicia Corder of the FBI St. Louis Division. “Corporate fraud is one of the top white-collar crime priorities for the FBI.”

Drafting lesson: Whenever another party is supposed to do something for your client, consider building in some kind of inspection- and/or audit rights; most people are honest, but mistakes do happen — and sometimes out-and-out fraud.