Dollar Tree Inc. says its remodeled West Memphis distribution facility will be able to serve up to 1,000 Family Dollar stores in the region. (Shutterstock)
Family Dollar Stores LLC, a subsidiary of publicly traded Dollar Tree Inc. of Chesapeake, Virginia, pleaded guilty Monday in Little Rock to a federal criminal charge related to a rodent-infested warehouse in West Memphis in a deal that includes a $41.675 million penalty.
The fine is “the largest-ever monetary criminal penalty in a food safety case,” according to a press release from the Department of Justice. Dollar Tree reported net income of $212 million for its third fiscal quarter, which ended Oct. 28
Prosecutors with the DOJ’s Civil Division’s Consumer Protection Branch in Washington and the U.S. Attorney’s Office for the Eastern District of Arkansas charged Family Dollar Stores with one misdemeanor count of causing food, drugs, medical devices, and cosmetics to become adulterated while being held under insanitary conditions. The charge was brought directly by the prosecutors in the form of a criminal information rather than as an indictment by a federal grand jury.
The plea agreement also requires Family Dollar and Dollar Tree to meet “robust corporate compliance and reporting requirements for the next three years,” prosecutors said.
Dollar Tree said it had fully cooperated with the federal investigation. A replacement warehouse costing up to $100 million is expected to open later this year and employ 300 workers.
In pleading guilty, the company admitted that it began receiving reports of mouse and pest problems at the West Memphis warehouse in August 2020 and of rodents and rodent-damaged products by the end of that year. But it continued shipping from the warehouse to more than 400 Family Dollar stores in Arkansas and five other states until January 2022, when a Food & Drug Administration inspection “revealed live rodents, dead and decaying rodents, rodent feces, urine, and odors, and evidence of gnawing and nesting throughout the facility.”
The plea agreement said that subsequent fumigation of the warehouse “resulted in the reported extermination of 1,270 rodents.”
“Consumers trust that products purchased from retail stores such as Family Dollar are safe,” Jonathan D. Ross, U.S. Attorney for the Eastern District of Arkansas, said in the release. “It is incomprehensible that Family Dollar knew about the rodent and pest issues at its distribution center in Arkansas but continued to ship products that were unsafe and insanitary. Knowingly selling these types of products not only places the public’s health at risk but erodes the trust consumers have in the products they purchase. Products shipped and sold are required to be safe for consumers and the safety of Arkansans and others are extremely important to this office. Let me be clear, if you conduct business in Arkansas and allow the shipment or sale of unsafe and insanitary products, you will be held accountable.”
