- Similac maker Abbott is under federal criminal investigation for its role in the baby formula shortage.
- The possible charges carry penalties of up to $500,000 for corporations and up to a year of prison time for individuals.
The US Department of Justice is investigating Abbott Laboratories, the maker of Similac baby formula, over its conduct that resulted in a plant shutdown and nationwide shortages last year.
If the DOJ's consumer protection unit finds evidence of criminal violations at the company's plant in Sturgis, Michigan, Abbott could face fines of up to $500,000 per offense and up to a year of prison time for individuals involved.
The sprawling healthcare giant made $43.7 billion in revenues in 2022, of which about $1.5 billion came from its US pediatric nutrition division, according to its annual report.
Abbott did not immediately respond to Insider's request for comment.
Under the Food, Drug and Cosmetic Act of 1938, the Food and Drug Administration specifies fines of up to $500,000 per offense for a misdemeanor by a corporation "that results in death, or a felony." Misdemeanors that do not result in death, and offenses by individuals, carry lesser penalties.
In all cases, those found responsible face up to a year in prison for each offense.
"It's a layup for a misdemeanor charge against Abbott and/or particular executives who were in charge of that plant," food-safety attorney Bill Merler told Crain's Chicago Business. Marler has represented clients in cases against Chipotle, ConAgra and Jack in the Box.
Felony charges, he noted, are more difficult to support, since they would require evidence of intent to mislead regulators and consumers.
In addition, the Centers for Disease Control said it could not conclusively link the multiple strains of bacteria found at the Abbott plant with those that led to the deaths of two infants in Ohio.
An Associated Press investigation last year found that US food safety regulators did not inspect Abbott or the other two largest baby-formula manufacturers in 2020.