Saving Seafood

StarKist admits fixing tuna prices, faces $100 million fine

October 22, 2018 — StarKist Co. agreed to plead guilty to a felony price fixing charge as part of a broad collusion investigation of the canned tuna industry, the U.S. Department of Justice announced Thursday.

The DOJ said StarKist faces up to a $100 million fine when it is sentenced. Prosecutors allege that the industry’s top three companies conspired between 2010 and 2013 to keep prices artificially high.

“We have cooperated with the DOJ during the course of its investigation and accept responsibility,” said StarKist chief executive Andrew Choe. “We will continue to conduct our business with the utmost transparency and integrity.”

StarKist is owned by South Korean company Dongwon Industries, one of the largest tuna catching companies in the world. The parent company’s website carries pledges to abide by ethical standards and good corporate citizenship.

The scheme came to light when Thai Union Group’s Chicken of the Sea attempt to buy San Diego-based Bumble Bee failed in 2015, according to court records. Chicken of the Sea executives then alerted federal investigators, who agreed to shield the company from criminal prosecution in exchange for cooperation.

Bumble Bee Foods last year pleaded guilty to the same charge and paid a $25 million fine, $111 million lower than prosecutors said it should have been. Prosecutors said they feared putting the financially struggling Bumble Bee out of business with a high fine and agreed to let the company make interest-free payments for five years.

Read the full story from the Associated Press at the Gloucester Daily Times

Hawaiian Longline Operators Accept $475,000 MARPOL Fine

September 12, 2018 — The U.S. Department of Justice and the U.S. Coast Guard have reached a consent decree with Hawaii-based operator Asure Fishery over the discharge of oily waste from a commercial longliner. It is the fourth MARPOL enforcement action that the USCG has brought against a Hawaiian longline fishing firm this year.

In a federal complaint filed last Friday, federal prosecutors alleged that the tuna longliner Jaxon T was not equipped for the treatment or storage of oily bilge waste under way, and she often discharged these wastes at sea. The complaint alleges that company managers Khang Quang Dang and Hanh Thi Nguyen had reason to know that the vessel lacked proper equipment for handling oily waste, but still allowed it to sail.

According to the complaint, the bulkhead separating the Jaxon T’s engine room from the fish hold had penetrations that allowed “free flow of fluids” between the two compartments. Apart from the potential safety implications of this arrangement, “substantial” amounts of water from melted ice would flow into the engine room, where it would raise the level of the water in the bilge. To address this problem, the crew would allegedly pump the bilge water directly over the side using a portable electric water pump, “one or more times per day.”

Read the full story at the Maritime Executive

 

Walmart resolves anti-trust lawsuit against Chicken of the Sea

May 23, 2018 — Walmart has reached an agreement with Thai Union’s Chicken of the Sea International regarding antitrust claims initially brought forth by the retailer back in October 2016, and later amended in May of 2017.

The terms of the agreement will see Tri-Union Seafoods – which trades as Chicken of the Sea International – pay a cash settlement to Walmart and partner with the retail giant in a series of joint programs and new product promotions. New product innovations will also be launched and featured across Walmart stores in the United States as a result of the agreement, Chicken of the Sea said in a press release.

Groups of American wholesalers, retailers, and foodservice outfits began filing lawsuits in 2015 alleging that the three biggest providers of canned tuna in the United States – Tri-Union Seafoods, StarKist, and Bumble Bee – had conspired to “fix, raise, maintain, and/or stabilize prices for PSPs [packaged seafood products]” in the country. The series of lawsuits, as well as Thai Union’s failed bid to purchase Bumble Bee in 2015, spurred the U.S. Department of Justice (DOJ) to launch its own criminal antitrust investigation, examining claims that the three companies had colluded to increase prices for packaged tuna from 2008-2010, until at least July 2015.

Read the full story at Seafood Source

 

Fishing company to pay $400,000 penalty following 4,200 gallon fuel spill into New Bedford Harbor

May 8, 2018 — A fishing company will pay $400,000 in penalties after spilling thousands of gallons of fuel into New Bedford Harbor and routinely dumping oily waste overboard, in violation of the Clean Water Act.

In August of 2017, the Challenge — a fishing boat owned by the New Bedford company Quinn Fisheries — sunk while docked on the city’s waterfront, causing a fuel spill that spread over a mile and killed at least five ducks.

The Coast Guard and the U.S. Department of Justice launched an inquiry, and found that the ship sunk when its captain failed to shut off a valve after illegally dumping bilge into the harbor and leaving the boat for the day, according to documents filed in U.S. District Court.

“Discharges of fuel and oily bilge wastes into our nation’s waters have long been prohibited and will not be condoned,” Captain Richard J. Schultz, Commander of the Coast Guard’s Sector Southeastern New England, said in a statement. “These defendants will pay significant penalties and conduct fleet-wide corrective measures for their discharges of oil into New Bedford Harbor and the ocean.”

Quinn Fisheries signed a consent decree agreeing to pay the penalties and correct violations, but did not admit liability for the discharges. The company could not immediately be reached for comment.

Read the full story at MassLive

 

Report detailing enforcement abuses barred from fisherman’s trial

January 29, 2018 — The first criminal trial of a Long Island fisherman charged in connection with a federal probe of a controversial fish-auction program is set to begin, but a report detailing fisheries enforcement abuses by the government has been barred from the trial.

Lawyers for Northport fisherman Thomas Kokell, charged in a multi-count indictment with overharvesting fluke, argued in pretrial motions that a 2010 federal inspector general’s report detailing abuses and “overzealousness” by the National Marine Fisheries Service was vital to the defense.

The Environmental Crimes unit of the U.S. Department of Justice has reached plea agreements with seven Long Island and New York City fishermen and fish dealers in connection with the six-year probe.

Most have been charged with mail fraud, wire fraud, conspiracy and false reporting crimes. Five received prison time or home detention, including a 74-year-old Mattituck fisherman charged with taking $78,000 in illegal fish. Fines and restitution have ranged from $150,000 to $932,000 and most lost their fishing or dealer permits.

In November 2016, Kokell was charged with conspiracy, mail fraud and falsification of federal records in connection with the illegal harvest of more than $400,000 worth of fluke. He is the first to fight the charges in court. The trial is set to begin next month.

His lawyers have argued that Kokell’s case should be handled as a civil, not criminal, case, citing findings from the inspector general’s report and the federal Magnuson-Stevens Act, which governs the fisheries.

Kokell, who was fined $120,000 in a 2006 case involving overfishing, had been a vocal critic of the marine fisheries agency‘s enforcement and legal practices.

He and his wife appeared with Sen. Chuck Schumer (D-N.Y.) at a Port Washington dock to demand action against the fisheries agency, a unit of the National Oceanic and Atmospheric Administration.

Read the full story at Newsday

 

Rafael Arrest Shines Light on Fishing System

December 1, 2017 — Dozens of New Bedford-based commercial fishing boats were ordered to stop fishing last week in the wake of the federal prosecution of fishing magnate Carlos Rafael, known as The Codfather, who pleaded guilty to tax evasion, cash smuggling, and falsifying records and misidentifying and mislabeling fish to avoid fishing quotas.

Members of the dwindling Vineyard fishing community who have been watching the proceedings say the tale is a sad commentary on the state of the industry and highlights flaws in its regulation.

“It’s a symptom of poor policy,” said Wes Brighton, a Vineyard fisherman and one of the only Islanders to hold a federal commercial groundfishing permit. Mr. Brighton fishes for lobster, conch, monkfish, and some cod from his boat Martha Elizabeth.

The system creates an imbalance, he said, giving independently-owned family fishing businesses little access to the fisheries and allowing larger corporations the ability to consolidate fishing permits and quota.

Mr. Rafael was arrested and charged in February 2016 after an undercover investigation. According to the government, federal agents posed as organized crime figures interested in buying his fishing business. For about four years, the Department of Justice said, Mr. Rafael lied to the government about the quantity and species of fish his boats in an effort to evade the strict federal quotas that are designed to protect the sustainability of certain fish species.

Read the full story at the Vineyard Gazette

 

New Bedford seafood manager pleads guilty to tax charges

November 29, 2017 — BOSTON — A New Bedford seafood manager pleaded guilty in federal court in Boston on Tuesday to failing to report earnings on his tax returns.

Orlando Cardoso, 44, pleaded guilty to two counts of filing a false income tax return. Sentencing is scheduled for March 8, 2018. The indictment said that Cardoso was a manager of the scallop division of a New Bedford seafood processor, according to a news release from the U.S. Attorney’s Office.

In 2012 and 2013, Cardoso said his only income was from his employer. However, the Department of Justice said Cardoso had received more $75,000 in cash and checks from his employer’s supplier and failed to report the income on his tax returns.

The charge of filing a false income tax return provides for a sentence of no greater than three years in prison, one year of supervised release and a fine of $100,000. Sentences are imposed by a federal district court judge based on the U.S. Sentencing Guidelines and other statutory factors, authorities said.

Read the full story at the New Bedford Standard Times 

 

Judge denies feds’ motion for Carlos Rafael to forfeit more vessels, permits

October 26, 2017 — NEW BEDFORD, Mass. —  Judge William Young didn’t waste any time denying the United States’ motion for reconsideration in the case of Carlos Rafael.

The government filed the reconsideration on Wednesday, the same day Young filed his judgment.

The government sought Young to reconsider the forfeitability of Rafael’s vessels and permits.

Young ordered four vessels and the accompanying permits to be forfeited on Oct. 11. U.S. Marshals seized the vessels the Lady Patricia, Olivia & Rafaela and the Southern Crusader II on Oct. 18.

The reconsideration stated, “the court may correct a sentence that resulted from arithmetical, technical or other clerical error” within 14 days. The government, again, is seeking Rafael to forfeit all 13 vessels and permits associated with his guilty plea to 28 counts of falsifying fishing quota, bulk cash smuggling and tax evasion.

Read the full story at the New Bedford Standard-Times

 

Professor: Carlos Rafael’s actions did little to affect the ‘big picture’

September 20, 2017 — NEW BEDFORD, Mass. — A study by an SMAST professor shows that claims alleging Carlos Rafael’s actions created hysteria in the New England Fishery are exaggerated. The study by Dr. Brian Rothschild was filed in federal court on Monday, a week before Rafael is scheduled to be sentenced for falsifying fish quotas.

Rothschild said he doesn’t condone anything Rafael did, but in his study argues the data associated with the fishing tycoon’s criminal actions reveal a minimal effect on stock assessments.

In 54 pages entitled “The effect of under-reported catch (URC) on the New England Fishery and stock dynamics,” Rothschild used data agreed upon by the Department of Justice and Rafael’s attorneys, who funded the study.

“The thing that stood out the most was in terms of the big picture the amount of fish that both parties agreed to was relatively small,” Rothschild told the Standard-Times. “I put no value judgement on that. That’s for others to do.”

In the study, Rothschild stated, “The URCs were so small relative to common-sense benchmarks, that they could hardly be noticed in either the abundance of fish in the ocean or in stock assessments.”

Among the dozens who’ve spoken out since Rafael pleaded guilty in March, including Gov. Charlie Baker, Mayor Jon Mitchell, the Maine Congressional delegation and other organizations, Rothschild is the first to present data minimizing the effects of Rafael.

“I think that it’s a very contentious issue. When you look at the data, it comes out different than what most people perceive,” Rothschild said. “At the end of the day, it’s the science that really counts.”

Read the full story at the New Bedford Standard-Times

MASSACHUSETTS: Marbleheader cleared in alleged fish smuggling plot

August 15, 2017 –A Marblehead businessman is asking the federal government to pay his attorney’s fees after being cleared of what he described as “being framed” by the U.S. Department of Justice.

Robert Kliss and his company North Atlantic Traders Ltd. was indicted in April, after a nearly five-year investigation. He was charged with smuggling, falsifying records and conspiracy.

In July, it took a jury only about an hour to clear him of all charges.

“This is a case the government never should have brought,” said Kliss’s Attorney Barry Pollack.

“I would have to say it was probably the most stressful thing I’ve very gone through,” Kliss said. “More so than an IRS audit and I’ve been through three.”

The Motion

In his motion for an award of attorney’s fees, which was filed in U.S. District Court Aug. 9, Pollack lays out all the ways the government’s case went wrong, including pressuring witnesses to, in some cases, exaggerate testimony and in one case invoke the Fifth Amendment.

Three cooperating witnesses pled guilty to a misdemeanor, “as the result of a hybrid charge and fact bargaining,” Pollack stated in his motion. “The government paid substantial consideration, in that respect, to each witness while pressuring him to provide testimony against Kliss.”

One of the most damning pieces of evidence against the government’s case however was when Agent Shawn Eusebio testified that during the more than four-year active investigation, no one on the government’s team realized Kliss wasn’t even in the country during the time he was alleged to have created and filed false documents in Massachusetts. Kliss had been in British Columbia with his son.

“My evidence was my stamped passport along with my son’s,” Kliss said. “That’s how bad the investigators and (prosecuting) attorneys are.”

Read the full story at the Marblehead Reporter

Read a statement from Stephen Ouellette, an attorney for North Atlantic Traders, here