Saving Seafood

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

 

 

North Atlantic Traders Acquitted on Smuggling and Conspiracy Charges in Less than One Hour of Jury Deliberation

August 15, 2017 — BOSTON — The following was released by Stephen Ouellette, attorney for North Atlantic Traders:

A 12-person federal jury acquitted federal tuna dealer North Atlantic Traders and its principal, Robert Kliss, on Lacey Act, smuggling and conspiracy charges in a case before District Judge William Young, investigated by the Department of Justice working with the National Oceanic and Atmospheric Administration.   The jury reached its verdict of not guilty on all five counts against both defendants in less than a full hour of deliberation.

Barry Pollack of Boston, attorney for Kliss, added, “the federal agents engaged in misconduct by pressuring witnesses to make exaggerated statements, which the jury saw through.”

Stephen Ouellette of Gloucester, Massachusetts, attorney for North Atlantic Traders, said “the verdict of not guilty reflected more than two decades of regulatory compliance by my client and its dedication to a sustainable fishery.  That NOAA’s overzealous prosecution in this and other cases following closely on the heels of the highly critical assessment of NOAA law enforcement by the Department of Commerce Office of the Inspector General can only be seen as an attempt to justify NOAA’s enforcement budget at the expense of the fishing industry and fundamental principles of justice.”

For further information, contact Stephen Ouellette at 978-281-7788 or 978-317-2542.

Poached eels: US strikes at illegal harvests as value grows

Law enforcement authorities have launched a crackdown on unlicensed eel fishermen and illicit sales along the East Coast.

August 7, 2017 — BREWER, Maine — Changes in the worldwide fisheries industry have turned live baby American eels into a commodity that can fetch more than $2,000 a pound at the dock, but the big demand and big prices have spawned a black market that wildlife officials say is jeopardizing the species.

Law enforcement authorities have launched a crackdown on unlicensed eel fishermen and illicit sales along the East Coast.

Although not a well-known seafood item like the Maine lobster, wriggling baby eels, or elvers, are a fishery worth many millions of dollars. Elvers often are sold to Asian aquaculture companies to be raised to maturity and sold to the lucrative Japanese restaurant market, where they mainly are served grilled.

But licensed U.S. fishermen complain poaching has become widespread, as prices have climbed in recent years. In response, the U.S. Department of Justice, the U.S. Fish and Wildlife Service and other agencies are investigating clandestine harvesting and sales.

Operation Broken Glass, a reference to the eels’ glassy skin, has resulted in 15 guilty pleas for illegal trafficking of about $4 million worth of elvers. Two people are under indictment, and more indictments are expected.

In Maine, more than 400 licensed fishermen make their living fishing for elvers in rivers such as the Penobscot in Brewer and the Passagassawakeag in Belfast every spring. They say law enforcement is vital to protecting the eels and the volatile industry.

Read the full story from the Associated Press at WTOP

Lawsuit takes aim at kings of the tuna industry

June 5, 2017 — Clandestine phone calls. Surreptitious emails. In-person meetings to avoid a paper trail.

The purpose of all the secrecy? To keep the price on packaged tuna — the quick source of protein found in cans and pouches — artificially high.

New details of exactly how the country’s three largest tuna companies, including Pittsburgh’s StarKist Co., allegedly spent years sharing information and collaborating are included in a pile of amended complaints submitted last month in federal court by numerous grocers, restaurants and suppliers.

It’s the latest round in an ongoing court battle alleging price fixing in the packaged seafood industry. Bumble Bee Foods and Tri-Union Seafoods, which trades under Chicken of the Sea, both based in San Diego, are also named.

The U.S. Department of Justice, which is conducting its own investigation into alleged price fixing in the industry, announced in early May that Bumble Bee Foods agreed to pay a $25 million fine after pleading guilty to conspiring with competitors to fix prices. The DOJ said the company also is cooperating with the antitrust investigation. It’s the third charge to be filed in the investigation.

The DOJ had released information that triggered the amended complaints, according to one attorney.

A spokesperson for Starkist, Chicken of the Sea and Bumble Bee declined to comment on pending litigation, but in 2016 attorneys representing StarKist urged the court to dismiss the case. They argued that it’s not unusual for people working in the same industry to know each other and to meet at industry gatherings.

But a lot of retailers are arguing that the evidence shows the exchanges were not so innocent.

The latest court documents — which are heavily redacted — include details such as Walmart and Ohio-based grocer Kroger charging that executives “used misleading subject lines on emails to affirmatively conceal the conspiratorial nature of their communications from those not involved in the conspiracy.”

Read the full story at the Pittsburgh Post-Gazette

National Fish executive makes deal in fraud case

April 24, 2017 — A senior executive at Gloucester-based National Fish & Seafood pleaded guilty to one count of tax fraud Thursday in U.S. District Court in Boston and is set to be sentenced in July, the Justice Department announced.

Richard J. Pandolfo, 71, of North Andover, was indicted by a federal grand jury last June on four counts of filing false federal tax returns between 2009 and 2012.

The charges were reduced to one count as part of a plea agreement with federal prosecutors. Pandolfo, an executive vice president at the East Gloucester seafood processor, faces up to three years in prison, one year of supervised release, a fine of $100,000 and restitution of $25,879 to the Internal Revenue Service.

Prosecutors charge Pandolfo failed to pay federal tax on about $90,000 of the $95,000 in “substantial supplemental income” he received from former National Fish & Seafood executive and part-owner Jack Ventola from 2008 to 2012.

According to the original indictment, some of the supplemental income went directly to Pandolfo, while other payments went to a shell company established in the name of Pandolfo’s wife, who is not named in the indictment, through another shell company controlled by Ventola.

Read the full story at the Gloucester Times

MASSACHUSETTS: Loss of Rafael’s permits could hurt New Bedford

April 24, 2017 — By late morning just before Easter weekend, three fishing vessels lined up at the docks to unload their catch, and they all belonged to one man — the local mogul known as the “Codfather,” Carlos Rafael.

“It’s a good haul,” a passing auction worker at the Whaling City Seafood Display Auction said under her breath, as crew members, some still in their orange waterproof bibs, unloaded the ice-packed fish.

For decades, Rafael’s fleet of some 40 vessels has been a staple of this city’s fishing industry, a sight as common as the seal that patrols the docks.

But now, Rafael’s recent conviction on federal charges that he cheated fishing regulations to boost his profits is putting his many vessels and permits up for grabs — potentially distributing them to ports along the New England coast. That would deliver an economic blow to New Bedford and the people who depend on the business created by Rafael’s fleet.

Rafael, 65, whose nickname given by locals derives from his brash business style, is expected to be sentenced in June to about four years in prison. Local officials are urging the federal government to keep the permits in New Bedford, home to the country’s most valuable fishing port and one of the last true ports on the East Coast.

Read the full story at the Boston Globe

Brooklyn Seafood Dealer Pleads Guilty for Illegally Trafficking American Eels

April 6, 2017 — The following was released by the U.S. Justice Department:

Today, Tommy Water Zhou pled guilty in federal district court in Norfolk, Virginia, to trafficking more than $150,361 worth of juvenile American eels, aka “elvers” or “glass eels,” in violation of the Lacey Act. As part of his guilty plea, Zhou admitted to illegally selling or purchasing elvers in interstate commerce, which had been harvested illegally in Virginia.

According to the statement of facts filed with the plea agreement, in 2010, Zhou established a seafood distribution company known as Wilson Group Sea Trading LLC. The company’s principle place of business was Brooklyn, New York, and its operations included importing seafood for domestic consumption and exporting seafood to international markets. In 2013, the defendant obtained a Maine elver dealer license, authorizing him to purchase and resell elvers harvested in Maine. Thereafter, using his Maine dealer license to cover his illegal activity, the defendant began purchasing and exporting elvers that were actually harvested from Virginia waterways in violation of Virginia law.

This plea was the result of “Operation Broken Glass,” a multi-jurisdiction U.S. Fish and Wildlife Service (USFWS) investigation into the illegal trafficking of American eels. To date, the investigation has resulted in guilty pleas for eleven individuals whose combined conduct resulted in the illegal trafficking of more than $2.75 million worth of elvers.

The guilty plea was announced today by Acting Assistant Attorney General Jeffrey H. Wood for the Justice Department’s Environment and Natural Resources Division, U.S. Attorney Dana J. Boente for the Eastern District of Virginia, and Acting Director Jim Kurth of the USFWS.

“We will not allow illegal wildlife traffickers to undermine managed fish species like the American eel,” said Acting Assistant Attorney General Wood. “In this operation, we are actively partnering with states all along the East Coast to enforce the law and protect our nation’s waterways from further exploitation.”

Read the full release here

Carlos Rafael faces $109K fine, loss of 13 vessels

April 4, 2017 — New Bedford fishing mogul Carlos Rafael may have to surrender up to 13 of his groundfishing vessels and must pay almost $109,000 in restitution to the Internal Revenue Service as part of his plea agreement with federal prosecutors.

Rafael pleaded guilty last Thursday to falsifying fish quotas, conspiracy and tax evasion in U.S. District Court in Boston and is scheduled to be sentenced there on June 27 by Judge William G. Young.

The 65-year-old Rafael could face up to 76 months in prison on the three charges — far less than the up to 20 years he would have faced under the original 27-count indictment. Federal prosecutors, however, have recommended a prison sentence of 46 months and a significant period of supervised release.

Young is not bound by the specifics of the plea agreement, nor must he follow federal prosecutors’ sentencing recommendations.

“Based on my experience, (Rafael) is probably looking at least three to four years in prison and a substantial fine,” New Bedford Mayor Jon Mitchell, a former federal prosecutor, told the Undercurrent News fishing website. “But I think the bigger question is what happens to his groundfish permits. They may be subject to forfeiture, but his forfeiture obligation can be subject in a number of ways.”

Read the full story at the Gloucester Times

New Bedford mayor: What’s next after Rafael’s guilty plea

April 3, 2017 — All eyes are on Carlos Rafael’s sizeable load of assets—32 fishing vessels, 44 permits and a business named Carlos Seafood—now that he’s facing up to 20 years of jail time when he receives his sentence in June.

His guilty plea agreement with the US government agrees to forfeiture of all 13 of his groundfish vessels, but his sizeable fleet of scallop vessels aren’t mentioned. A spokesperson at the Department of Justice (DOJ) declined to speculate on whether the federal government could seize these after his sentencing in June if Rafael couldn’t come up with the money to pay his fines, set at up to $7 million in the plea agreement.

New Bedford mayor Jon Mitchell, a former federal prosecutor, said there is flexibility within the terms of the plea agreement.

“Based on my experience, he’s probably looking at least three to four years in prison and a substantial fine,” Mitchell told Undercurrent News. 

Rafael is facing multiple counts of federal crimes, some of which include a maximum sentence of five years and one of which provides a maximum sentence of 20 years.

“But I think the bigger question is what happens to his groundfish permits,” Mitchell said. “They may be subject to forfeiture, but his forfeiture obligation can be subject in a number of ways.”

Typically, in other cases where the government seizes assets, those assets are sold by the government in an open auction; however, this case is unusual, making the asset sale process possibly run differently, a spokesperson for the DOJ told Undercurrent.

Such a sale at a government auction raises big concerns for Mitchell. 

“There’s a chance they may be bought up by government interests outside the port, and that scenario may have a direct impact on the industry here,” he said.

Mitchell plans to argue for Carlos’s permits to remain in the port of New Bedford, the largest seafood port in the United States.

The DOJ and the National Oceanic and Atmospheric Administration (NOAA) could substitute cash for the forfeiture of vessels by allowing Carlos to pay an equivalent amount of cash, attained through a sale of the vessel to a New Bedford buyer, instead of simply handing the vessels over to them to sell, Mitchell said. 

Read the full story at Undercurrent News

Rafael scheduled to plead guilty to evading fish quotas, smuggling money

March 9, 2017 — Carlos Rafael, who was labeled by the Department of Justice as the owner of the largest commercial fishing business in New England, will plead guilty to federal charges as part of a settlement he reached with the government, the U.S. Attorney’s office in Massachusetts said Wednesday.

Rafael of Dartmouth was scheduled to appear in federal court on March 20. Instead he’s scheduled to plead guilty to evading fishing quotas and smuggling profits to Portugal in U.S. District Court in Boston at 2 p.m. on March 16. The U.S. Attorney’s office provided no further details regarding the plea deal.

Rafael’s attorney, William Kettlwell, did not return requests asking for comment.

Often referred to as the “Codfather” as the owner of more than 40 boats ported in New Bedford and Gloucester, Rafael faced one count of conspiracy, 25 counts of lying to federal fishing regulators and one count of bulk cash smuggling.

The indictment filed by the U.S. Attorney last May listed 22 examples of Rafael falsely claiming his vessels caught either haddock or pollock from June 2012 through January 2016. According to the indictment, in those circumstances Rafael actually caught fish that were subject to stricter quotas than haddock or pollock like American plaice, yellowtail or gray sole.

Read the full story at the New Bedford Standard-Times