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NOAA: Rafael’s misreported fish ‘disappeared’ at Whaling City auction

December 10, 2019 — A NOAA official has charged that if federal officials were not watching when Carlos Rafael offloaded fish at the Whaling City Display Auction, the catch simply “disappeared.”

“If there was no observer on the boat, no dockside monitor, no state environmental police, no NOAA law enforcement officer, the fish would just simply disappear,” NOAA Special Agent Troy Audyatis said, “Thousands upon thousands of fish would simply disappear.”

Audyatis made the charge at a Dec. 3 meeting of the New England Fisheries Management Council while making the presentation “Catching the Codfather,” and said the New Bedford display auction was the location where Rafael offloaded much of the thousands of pounds of fish that were either under or misreported.

“Any given day fish would just disappear. There’s fish that he sold [that] he didn’t report having available for sale to NOAA and he didn’t buy from a third party, but yet he sold thousands of pounds of fish that day,” Audyatis said.

If fishing boat owners don’t report their catch to NOAA (the National Oceanic and Atmospheric Administration), there is no way for the federal government to know how much of a given species is in the ocean. Federal regulations designed to save fish stocks are dependent on knowing how much of a species is present.

Read the full story at the New Bedford Standard-Times

NOAA, Coast Guard: More regs needed in wake of Rafael ’s fraud

December 4, 2019 — Representatives from NOAA and the US Coast Guard are using Carlos Rafael’s case as evidence that more regulations and oversight are necessary in the groundfishing industry.

NOAA Special Agent Troy Audyatis explained to a crowd gathered at the New England Fishery Management Council Meeting on Tuesday how NOAA worked with other agencies to catch the so-called Codfather and said, “We need to prevent something like this from ever repeating itself down the road.”

Rafael was sentenced to 46-months in federal prison for falsifying fishing quota, cash smuggling, and tax evasion in a criminal case, and was ordered to pay a $3 million penalty to address the federal government’s civil claims against him which included counts of misreporting and underreporting his groundfish catch.

Audyatis said if there wasn’t an observer, who collects data from U.S. commercial fishing and processing vessels for NOAA, on Rafael’s vessels or a dock-side officer “thousands upon thousands of fish would simply disappear” without being reported.

One of the reasons Audyatis gave for Rafael being able to misreport and underreport was the vertical integration of Rafael’s business.

Read the full story at the New Bedford Standard-Times

‘We caught him using his own words’ NOAA: Rafael’s own fishery complaints opened door to his downfall

December 4, 2019 — It turns out that it was Carlos Rafael himself who opened the door to the civil and criminal investigations that resulted in his exile from the commercial fishing industry and his current residency at the FMC Devens federal prison.

In January 2015, angered by cuts to his portion of federal groundfish disaster relief, Rafael publicly railed against the process and said he planned to sell his more than 40 vessels and the approximately 60 federal fishing permits attached to them.

And with that, according to a NOAA Office of Law Enforcement presentation Tuesday to the New England Fishery Management Council on the criminal case against Rafael, five federal law enforcement agencies saw their opening.

They began widespread undercover investigations that ultimately led to Rafael’s indictment and conviction in November 2017 for fisheries reporting violations, tax evasion and bulk smuggling.

“We took this as an opportunity to reach out to Carlos Rafael as interested buyers,” said OLE Special Agent Troy Audyatis. “We caught him using his own words.”

Read the full story at the Gloucester Daily Times

NEFMC – Important Meeting Update – Time Changes for Tuesday, December 3 Agenda iIems

December 2, 2019 — The following was released by the New England Fishery Management Council:

This is an important update from the New England Fishery Management Council about its December 3-5, 2019 meeting in Newport, RI.

WHAT’S GOING ON:  Due to the winter storm that is impacting the region, the Council will begin its meeting at 10 a.m. on Tuesday, December 3 instead of 9 a.m. as originally scheduled in order to allow for additional travel time.
 
HAS THE AGENDA CHANGED:  The Council is not eliminating any agenda items.  However, timeslots have been adjusted to account for the delayed start, and the order of a few items has shifted.
  • Most notably, the open period for public comment and the update titled “Carlos Rafael Case/Misreporting Issues” both will take place following the lunch break under the revised agenda.
  • The item titled “Draft National Standard 1 Technical Guidance” now will be discussed prior to the lunch break.
WHERE CAN I FIND OUT MORE:  Visit the meeting webpage at NEFMC December 3-5, 2019 Newport, RI.
  • The revised agenda is available directly at important meeting update.
QUESTIONS:  Contact Janice Plante at (607) 592-4817, jplante@nefmc.org.

Coast Guard: Catch misreported on 350 fishing trips

December 2, 2019 — The Northeast multispecies groundfishery may have been victimized by several misreporting schemes through a five-year period and “potentially up to 2.5 million pounds of regulated species were misreported by vessels from multiple sectors” in the fishery, according to a Coast Guard investigation of misreporting.

The report chronicling the Coast Guard investigation from 2011 to 2015 will be presented to the New England Fishery Management Council on Tuesday during the first of its three days of meetings in Newport, Rhode Island.

The Coast Guard presentation is one of two scheduled agenda items dealing with catch misreporting that will be before the council on Tuesday.

The same day, NOAA Fisheries’ Office of Law Enforcement is scheduled to make a presentation to the council specifically on misreporting uncovered during the criminal case brought against now-incarcerated New Bedford fishing mogul Carlos Rafael.

In its 21-page report, the Coast Guard said the analysis by its Boston-based First District enforcement staff identified more than 350 vessel trips during the period of 2011 to 2015 in the Northeast multispecies groundfishery “where there appears to be evidence of misreporting.”

Read the full story at the Gloucester Daily Times

Carlos Rafael Inks $25 Million Deal with Blue Harvest Fisheries

November 29, 2019 — The highly-anticipated forced sell-off of “Codfather” Carlos Rafael’s fishing fleet appears to be near completion, only months after the convicted criminal unloaded his scallop boats.

Undercurrent News reports that Blue Harvest Fisheries has inked a $25 million deal to buy at least 35 vessels and skiffs from Rafael along with their permits and fishing quotas. Blue Harvest maintains fleets in Fairhaven and in Newport News, Virginia. It is backed by Bregal Partners, a New York City-based private equity firm.

The pending deal with Blue Harvest – which still must survive a “right of first refusal” where other harvesters could step forward – comes as Rafael remains behind bars.

Rafael was arrested in 2016 following a federal sting, and was convicted on 28 criminal counts in 2017. Rafael admitted to raking in illegal profits and gaming the system by mislabeling 700,000 pounds of harvested fish over four years. He also illegally avoided paying taxes. Rafael was sentenced to 46 months in federal prison. To settle a separate civil suit with the National Oceanic and Atmospheric Administration, he was forced to sell his fishing fleet, pay $3 million in penalties, and never engage in the world of commercial fishing again.

Read the full story at WBSM

Blue Harvest inks deal to acquire 35 Rafael groundfish vessels for $25m

November 26, 2019 — One of the most anticipated forced sell-offs in the history of US commercial fishing – the unloading of Carlos Rafael’s fleet in New Bedford, Massachusetts — looks to be on the verge of completion.

Blue Harvest Fisheries, a US scallop and groundfish supplier backed by New York City-based private equity Bregal Partners, has signed a purchase agreement to buy at least 35 vessels and skiffs and all of their associated permits from Carlos Rafael for nearly $25 million, documents obtained by Undercurrent News confirm.

The deal includes millions of pounds of quota for at least eight types of fish in the Northeast multispecies fishery, including cod, haddock, American plaice, witch flounder, yellowtail flounder, redfish, white hake, and pollock.

Read the full story at Undercurrent News

JOHN SACKTON: The Winding Glass: Can we stop IUU fishing by thinking outside the box?

November 21, 2019 — SEAFOOD NEWS — Campaigns against IUU fishing by both the industry and environmentalists continually run up against a problem:  government enforcement.

Enforcement is not as much of an issue for rich countries with well-developed fisheries management systems, and strong enforcement histories.

In these cases, when IUU fishing happens, it can be successfully exposed, prosecuted and ended.

For example, in 2012, three Scottish fish factories and 27 skippers pleaded guilty and were fined more than £1 million for illegally harvesting mackerel in excess of EU quotas.

Carlos Rafael, the largest owner of scallop vessels in New Bedford, went to jail in 2017 over falsifying sales records to hide illegal landings.

Similar enforcement has happened in Australia, New Zealand, Norway, Japan, France and elsewhere.

But too often governments are not able to effectively enforce against IUU, either because of lack of will, lack of resources, or simply poor ability to manage fisheries.

Our story today about the Vaquita porpoise in Mexico is a case in point.  Although Mexico is part of an international agreement to close fishing in the Northern Gulf of California, vessels were detected fishing in the closed zone this month.

The response of the UN CITES commission is to monitor the situation and take another look in 2020, a year from now.

There is another way we might approach IUU fishing, using supply chains to bypass governments that are ineffective or too weak to prevent the mixing of legal and illegal catch.

That is a blockchain system.  Last week at the International Coldwater Prawn Forum in St. John’s, Dan McQuade, Marketing Director for Raw Seafoods, a scallop company operating out of Fall River, MA, presented the blockchain system his company developed in partnership with IBM.

It was one of the clearest examples of a blockchain that I had seen.

Block I represents each scallop bag processed onboard a boat.  It is tagged with a printed label giving information on time and date, where caught, boat name, and other parameters as needed, even hold temperature.

Block 2 represents the receiving of this at the scallop packing plant.  Scallops are graded, repacked for distribution either at foodservice or retail.   Block 2 incorporates the link to Block 1, but details processing date, grade, size, license no., etc.

Block 3 represents the distributor, in this illustration, Santa Monica Seafoods.  This tag includes the date received, location, size, and date shipped to their customer.

Block 4 represents the restaurant, which includes date received, size, sell-by date if any, and various consumer marketing materials.

By scanning a QR code, the restaurant customer (or any participant in the supply chain) can bring up all the connected information at each step in the process.  The blockchain is in effect a guarantee that the original raw, untreated scallop, was never mixed with treated or adulterated scallops during its passage through the supply chain.

The technology of the blockchain involves public and private key cryptography, which makes it impossible to alter any of the blocks in the chain, once they are registered.

Raw Seafoods is promoting this as a marketing strategy with IBM to increase customer trust and satisfaction with their all-natural scallops.

But imagine a similar system applied to an area with significant IUU fishing, such as the upper Gulf of California.

In this case, fishing co-ops would be the originators of the first block, detailing product, date caught, and location.  Processors and receivers would be the second block, detailing date received, product, pack, ship date.  Importers to the US would be the 3rd block, again showing date received, customs data if needed, size, count, pack etc.  The buyer, whether a retail or foodservice user of shrimp would be the 4th block, registering the product into their system.

The cost of this would include computers, printers, bar code readers, the cloud computing services, and programming necessary to make it work.  But once in place, it is scalable at a remarkably low cost.  The transaction cost for the entire supply chain could likely be reduced to one or two cents per lb.

Obviously, the system relies on each party putting accurate information into their block.  However, because the record is permanent and instantly traceable, it lends itself to low-cost audits as needed.  For example, if the fishing co-op itself were suspected of laundering illegal catch, data controls like GPS location and date could be added, to make this more difficult.

When IUU fish or shrimp is comingled with legal product, it becomes infinitely harder to track.

The benefit to fighting IUU fishing is that the blockchain tag could become a buying or importing requirement into the US.  This would not eliminate IUU fishing going to underground or other markets, but it would allow non-government entities to provide the resources to control their own supply chain requirements.

Implementation of a system like this in an area with high IUU fishing would not depend on government enforcement action but instead would use the blockchain technology to validate the product from its point of harvest right through to its point of consumption.

This would allow buyers to actually avoid purchasing fish or shrimp that had co-mingled IUU product.

Enforcement to require only legal product, like with toothfish, for example, can be quite successful at reducing and eliminating IUU fishing.  With toothfish, it took years of concerted action by both the legal toothfish industry, governments in the fishing nations, a UN port state agreement and backlisting of IUU vessels, and US laws regulating imports of toothfish.  There simply is not the money or will in the international community to replicate this wherever IUU fishing is taking place.

Investment in a blockchain designed to reduce or eliminate IUU fishing from a regional hot spot could be a far less costly technological solution that does not depend on the enforcement budget of the governments involved.

However, it would depend on the commitment of the legal fishing parties at all levels of the supply chain.  Unless the harvesters at the first level buy into the system, it will not work.  But here, the provision of incentives would be far less costly than a broken enforcement system.

As these chains begin to be implemented for marketing purposes, it may be worthwhile to explore what a real IUU focused blockchain would look like as an alternative to the painstaking diplomatic process of governments convincing each other that they have to spend the resources and act.

This story was originally published on SeafoodNews.com, a subscription site. It is reprinted with permission.

Sacred Cod, Sustainable Scallops

October 31, 2019 — “I am a pirate,” Carlos Rafael once told a group of federal regulators at a Fisheries Management Council meeting. “It’s your job to catch me.” And they did.

Rafael, aka the Codfather, was one of the most successful fishermen on the East Coast. He owned more that 50 boats, both scallopers and ground-fishing vessels, in New Bedford, the #1 value fishing port in the U.S. All the boats were emblazoned with his trademark “CR.”

Scallops sit in the sand underwater in the Nanatucket Lightship area. This photo was taken duringIn 2016, after an undercover sting, he was arrested on charges of conspiracy and submitting falsified records to the federal government to evade federal fishing quotas. In addition to his boats, the Codfather owned processors and distributors on the docks. When he caught fish subject to strict catch limits, like cod, he would report it as haddock, or some other plentiful species. He got away with it, at least for a while, because he laundered the illegal fish through his own wholesalers, and others at the now defunct Fulton Street Fish Market in New York City.

“We call them something else, it’s simple,” Mr. Rafael told undercover cops who feigned interest in buying his business. “We’ve been doing it for over 30 years.” He described a deal he had going with a New York fish buyer, saying at one point, “You’ll never find a better laundromat.” Caught on tape, the jig was up. In 2018, Rafael, 65, was convicted on 28 counts, including conspiracy, false labeling of fish, bulk cash smuggling, tax evasion and falsifying federal records. CR? Caught red-handed!

Read the full story at Medium

Carlos Rafael scallop boats to stay in New Bedford

September 26, 2019 — Eleven scallop boats from the fleet of convicted fisheries violator Carlos Rafael will keep working out of New Bedford under local ownership, a victory for industry advocates.

Charlie and Michael Quinn, the father and son co-owners of Quinn Fisheries, appeared at the docks Tuesday afternoon with New Bedford Mayor Jon Mitchell to announce they had closed on a deal to buy six of the boats.

The Quinns paid about $40 million, said Michael Quinn. Mitchell, who with other Massachusetts political and industry leaders pushed to keep the boats in New Bedford, said the other five vessels and their permits are also now going to new owners based in the city.

Rafael is serving a 46-month federal prison sentence for tax evasion, falsifying fisheries landing reports and related offenses. The so-called “Codfather” controlled a large share of the groundfish and scallop fleets, until he was brought down by undercover federal agents.

Read the full story at National Fisherman

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