Saving Seafood

In plea deal, former National Fish president likely to pay $1m in restitution

December 29, 2017 — Former National Fish and Seafood president Jack Ventola will likely pay $1 million in restitution to the Internal Revenue Service (IRS) and face jail time after defrauding his former company, which is majority owned by Hong Kong-based conglomerate Pacific Andes International Holdings (PAIH).

Ventola was arrested on Nov. 23, 2015, in connection with failing to pay taxes on more than $2 million in income he earned from 2006 to 2009, according to the US attorney’s office for the district of Massachusetts. He was indicted on three counts of filing false tax returns and one count of conspiracy to defraud the IRS.

Ventola and two others, former National Fish senior sales executive Richard Pandolfo, and Michael Bruno, an accountant who didn’t work for the company but served on its board, face charges that include tax fraud in connection with an alleged scheme that reportedly charged the company for labor services never provided.

Pandolfo and Bruno pleaded guilty but have yet to be sentenced. Ventola had initially pleaded not guilty but later signed a plea agreement with prosecutors that was filed on Dec. 19. As part of that agreement, Ventola admitted to seven counts of making and subscribing a false tax return while prosecutors dropped three more serious charges: conspiracy, wire fraud and mail fraud.

For the charges he admitted to Ventola could face a maximum of three years in prison, three years supervised release, a $250,000 fine and restitution.

However, prosecutors will instead recommend a lesser prison sentence, a to be determined fine and $1.073m in restitution. Judge Douglas Woodlock is slated to sentence Ventola on March 27.

Read the full story at Undercurrent News

 

Boston Globe: What’s fair in breaking up Carlos Rafael’s empire?

December 18, 2017 — Randy Cushman, a fourth generation fisherman in Maine, knows what the crimes of Carlos Rafael cost him.

Cushman fishes out of the bucolic village of Port Clyde, population 307, the sort of place many New Englanders might still associate with the region’s storied, struggling fishing industry. Last season, he had to pay $49,000 for fishing quota, most of it for American plaice, a species of groundfish commonly known as dabs. Cushman’s own allowance on the fish ran out after only four days on the water, forcing him to bargain with other fishermen for more.

Up the coast, Rafael had been catching dabs in the Gulf of Maine too. But in an elaborate criminal scheme, the New Bedford fishing tycoon, owner of about 40 vessels, was directing his captains to report dabs as other kinds of fish, often haddock, which is subject to much higher limits. Breaking the rules let Rafael evade the kind of payments that Cushman made. It also depressed prices by flooding the market with black-market fish. Worst of all, the scheme also meant fishing regulators were getting inaccurate information about how many fish Rafael’s empire was scooping out of the Atlantic, bad data that fishermen suspect distorted how scientists analyzed ocean trends, and Cushman believes skewed the way regulators set the amount each fishermen can catch before having to start paying.

“He definitely hurt my business,” Cushman said. Bottom line: “I should have ended up with more allocation on dabs,” he said.

Rafael, whose downfall came after he boasted of his scheme to undercover IRS agents posing as Russian mobsters, is now serving a 46-month sentence in federal prison. The made-for-TV story, complete with an illicit cash buyer in New York, bank accounts in Portugal, allegations of corrupt sheriff deputies, and broad hints that other players on the waterfront must have been in the know, has transfixed New England’s close-knit fishery. Rafael’s arrest has thrust arcane fisheries policies into the spotlight, touched off a political battle between Massachusetts and Maine about the future of his businesses, and raised questions about how fishing regulators can provide justice for his victims and prevent a scheme like his from infecting the fishery again. The feds have already seized some of his permits and four of his boats, but more punishments are widely expected. A spokeswoman for the National Oceanic and Atmospheric Administration, Jennifer Goebel, said the regulatory agency was considering further sanctions against Rafael but that “it’s longstanding NOAA policy not to discuss pending enforcement matters.”

Read the full editorial at the Boston Globe

Fishing industry awaits Rafael outcome

Stakeholders weigh in on fate of Codfather’s permits, penalties

September 22, 2017 — The specter of Carlos Rafael, along with his legal baggage and trove of groundfish permits, continues to hang over the New England commercial fishing industry like a shroud that most stakeholders wish would just go away.

The sentencing of Rafael, the New Bedford fishing magnate known as “The Codfather” for his expansive vessel and groundfish permit holdings, is set to begin Monday in U.S. District Court in Boston on charges of conspiracy, lying to federal fishing regulators about the nature and size of his groundfish landings and bulk smuggling.

“We can’t wait for this to be resolved,” said Maggie Raymond of the Associated Fisheries of Maine.

The sentencing of the 65-year-old Rafael, who pleaded guilty in March as part of a plea deal with federal prosecutors, won’t end the contretemps. Not by a long shot.

While everyone seems to agree that Rafael should feel the full wrath of the law for his admitted misdeeds — he faces up to 76 months in prison, restitution of $109,000 to the IRS and the seizure of at least the 13 groundfishing vessels used in his scam — full resolution only will come when NOAA Fisheries decides the final fate of his 42 groundfishing permits.

There is no shortage of opinions of what NOAA should do.

Read the full story at the Gloucester Times

Sentencing Approaches for New England’s Carlos Rafael

July 23, 2017 — One of the biggest fishing magnates in the country could be sentenced to prison this coming week, and the forfeiture of his boats could be a big hit for the Massachusetts port where he amassed a small empire.

Between his scalloping and groundfishing boats, Carlos Rafael – nicknamed “the Codfather” — came to be the largest single owner of fishing vessels in New England, and possibly in the country.

But in 2015, undercover IRS agents posed as Russian criminals and convinced him they wanted to buy his entire fleet. Rafael unpacked an elaborate criminal enterprise to the agents — one he said he’d been carrying out for three decades.

Court records show that Rafael valued his business at $175 million. He told the undercover agents the value came from the way he cheated the government quota system. Rafael’s men would haul in a more valuable fish — like cod — and report it as a cheaper species with a much greater quota. Now Rafael is facing prison time for counts including tax evasion and bulk cash smuggling — all of which he admitted to.

But people in New Bedford want to know: What will become of the 13 fishing boats — and all the permits attached to them — that were tied to Rafael’s crimes? Will they be auctioned off on the open market, held by an entity such as the city of New Bedford or perhaps removed from circulation?

Read the full story at NPR

Seafood exec escapes jail time

July 14, 2017 — A senior sales executive at a Gloucester seafood processing company avoided jail time, but will spend the next six months under home confinement and must pay restitution of $25,879 after his federal sentencing Thursday for tax fraud.

Richard J. Pandolfo, 71, who lives in North Andover and has been an executive vice president at National Fish & Seafood on Parker Street, was sentenced by U.S. District Court Judge Richard Stearns to a year’s probation, with six months to be served in home confinement.

The judge also assessed a fine of $5,000 and ordered Pandolfo to pay restitution to the IRS for the amount he had failed to pay on “supplemental income” he had received from the company and former National Fish executive and part-owner Jack Ventola between 2008 and 2012.

Pandolfo was indicted in June 2016 by a federal grand jury on four counts of filing false tax returns. As part of a plea agreement with federal prosecutors, the charges were reduced to a single count. But he still faced a federal prison term of up to three years and a fine of up to $100,000 in addition to the restitution when he stood for sentencing Thursday.

According to the U.S. Attorney’s office, Pandolfo failed to pay federal tax on about $90,000 of the $95,000 in supplemental income he received from Ventola from 2008 to 2012. According to the original indictment, some of the supplemental pay went directly to Pandolfo, while other payments went to a shell interior design company established in the name of Pandolfo’s wife. Pandolfo’s wife was not charged in the indictment.

Read the full story at the Gloucester Times

MASSACHUSETTS: Authorities’ visit to fish house remains a mystery

June 23, 2017 — Business appeared to be carrying on as usual Friday at Lou-Joe’s Fresh Seafood, a day after agents from the Internal Revenue Service and two other government agencies visited the small fish processing plant.

Workers were cutting fish on Friday inside the 3,800-square-foot plant at 24 Washburn St., New Bedford, near where Interstate 195 crosses the Acushnet River. Fish trucks were coming and going from the loading docks.

An employee in the office said he was not the owner and declined to comment on the situation.

On Thursday, about a dozen officials from the IRS, Massachusetts Environmental Police, and National Oceanic and Atmospheric Administration visited the plant. An IRS spokeswoman told The Standard-Times the IRS employees were on official business, but she would not say anything further.

A corporate document filed with Massachusetts Secretary of State William Galvin’s office shows two people listed as officers of a now-dissolved corporation by the name Lou-Joe’s Fresh Seafood, Inc.: Luis Martins as president and treasurer, and Mary Martins as secretary. Both are listed at the same address: 17 Bertrand’s Way, Acushnet.

The business summary on the secretary of state’s website shows an involuntary dissolution of the corporation in 1998.

Laurie Flynn, director of corporations for Galvin, said the corporation was dissolved for failing to file the required annual reports after 1990. But operating without corporation status is not illegal as long as the business does not use “Inc.” in the name, she said. Lou-Joe’s could be operating as a sole proprietorship or partnership, for example, she said.

Neither Luis Martins nor Mary Martins could be reached at the business or at the house on Bertrand’s Way in Acushnet.

Read the full story at the New Bedford Standard-Times

MASSACHUSETTS: New Bedford Worries About What Happens To ‘The Codfather’s’ Fishing Permits

April 11, 2017 — Down on the docks of the Whaling City, everyone knows him as “Carlos.”

“I’ve been working for Carlos for 12 years now,” says Richard Mauzerolle of Weston. “Sometimes he should watch out who he’s talking to,” he adds with a laugh, referencing the IRS sting that landed Carlos Rafael guilty on 28 counts in late March. “But he’s a good guy.”

The fall of New Bedford fishing boss Carlos Rafael could be a big blow for the city’s port. And if his fishing permits are forfeited and end up in another state, it could hurt Massachusetts as a whole.

What happens to Rafael’s boats — and the permits attached to them — will be decided by a federal judge. And people in New Bedford want them to stay in the city.

‘He’s One Of My Main Livelihoods’

Mauzerolle is in the spray foam business — he insulates holds on fishing boats owned by Rafael. He’s one of hundreds of people who work with the man known as “the Codfather,” who gives Mauzerolle about a third of his business.

“He’s one of my main livelihoods right down in the area, so it’d be a shame to have him lose anything,” says Mauzerolle, standing in front of his box truck with a massive Donald Trump sign stuck to the side. Rafael, he says, has “brought this fishing industry back to where it’s supposed to be down here.”

In 2004, Rafael spoke to an archivist at the Working Waterfront Festival in New Bedford about how he amassed so many boats, highlighting the importance of diversifying between scallops and groundfish.

Read the full story and listen to the radio report at WBUR

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

Partial transcript of Rafael’s meeting with undercover IRS agents revealed

December 12, 2016 — NEW BEDFORD, Mass. — Documents filed in U.S. District Court in Boston Thursday show seafood mogul Carlos Rafael implicating his whole family in his alleged scheme to smuggle cash to the Azores and turn large catches of protected fish into large amounts of cash by selling them under the table.

Rafael is also quoted as boasting that he pressured Bristol County Sheriff Thomas M. Hodgson, into giving Deputy Sheriff Antonio Freitas a raise and promotion, and in turn using Freitas to get large amounts of cash around immigration and customs at Logan Airport.

The document is an official response to requests by Rafael and Freitas to be tried separately to preserve their individual rights.

The items are contained in a partial transcript of a meeting Rafael had with two men he thought were Russian businessmen but who were actually IRS agents operating under cover to learn how Rafael did business.

Rafael explained that as many as eight people in his family would make the trip to the Azores carrying cash that Freitas could bypass from customs.

Read the full story at the New Bedford Standard-Times

MASSACHUSETTS: Gloucester hooked to New Bedford fish fraud case?

February 29, 2016 — GLOUCESTER — The stunning arrest of New Bedford fishing mogul Carlos Rafael last Friday on federal conspiracy and fraud charges may have a Gloucester connection.

The affidavit submitted in support of the federal criminal complaint against Rafael and bookkeeper Debra Messier by Internal Revenue Service Special Agent Ronald Mullett, one of the undercover operatives involved in stinging Rafael, includes an oblique reference to Gloucester.

The reference takes place in a quote attributed to a New York man that federal investigators allege to be the wholesale buyer of Rafael’s illicit, off-the-books fish. The man initially is referred to only as “Michael,” but later in the affidavit also is called “Perretti.”

During the discussion, according to the affidavit, the talk turned to laundering money.

Gloucester talk

“During the meeting, the UCs (undercover agents) also told Perretti that they had cash on hand from an insurance fraud they perpetuated,” according to the affidavit. “Perretti explained that he could launder money from the UCs, suggesting he could reach out to individuals he used to charge 15 percent in the past.”

Read the full story at Salem State News