Saving Seafood

Feds will keep only two of Carlos Rafael’s seized vessels

November 23, 2018 — NEW BEDFORD, Mass. — More than a year after a judge ordered Carlos Rafael to forfeit four fishing vessels, the government will retain only two, according to court documents obtained by The Standard-Times.

Rafael, who is serving a 48-month prison sentence for falsifying fishing quota, tax evasion and bulk cash smuggling, and the government filed a settlement agreement last Friday. Judge William Young filed a final forfeiture order Monday.

According to the order, the Lady Patricia and all its permits as well as the Olivia & Rafaela and its permits must be forfeited to the United States. A total of $306,490 must also be paid to the United States.

As for the other two vessels seized by the government, the Bulldog will be released to B & D Fishing Corp. and Rafael’s wife, Conceicao, and the Southern Crusader II will be released to R and C fishing Corp., Joao Camarao and Conceicao Rafael. Each shared partial ownership with Carlos Rafael.

Read the full story at the New Bedford Standard-Times

 

A Famed Fishing Port Staggers as Carlos Rafael Goes to Jail

February 12, 2018 — NEW BEDFORD, Mass. — Carlos Rafael, whose initials are emblazoned on boats all over this port city, boasted that his fishing empire was worth even more than official records showed. His trick? When he caught fish that are subject to strict catch limits, like gray sole or cod, he would report that his nets were filled with something far more plentiful, like haddock.

“We call them something else, it’s simple,” Mr. Rafael told visitors who seemed interested in buying his business. “We’ve been doing it for over 30 years.” He showed off a special ledger labeled “cash.” And he described an under-the-table deal he had going with a New York fish buyer, saying at one point, “You’ll never find a better laundromat.”

But Mr. Rafael’s visitors turned out to be Internal Revenue Service agents, and the conversations, caught on tape and described in court documents, began the unraveling of Mr. Rafael, whose reign over a segment of this region’s fishing industry gave him his larger-than-life nickname, “the Codfather.”

As Mr. Rafael sits in prison, having pleaded guilty to lying about his catches and smuggling cash out of the country, nearly two dozen of his boats have been barred from fishing for species like cod and haddock, grinding part of the centuries-old maritime economy in the nation’s most lucrative fishing port to a halt.

Fishermen, ice houses and shoreside suppliers who once did business with Mr. Rafael are anxious, as their own businesses have slowed or stopped. Regulators, who oversee a federal system aimed at limiting what the industry fishes for, want more penalties, raising doubts about the future of the port when it comes to groundfish, the bottom-dwelling species like cod that were once the backbone of the fishing industry in New England.

“There are a lot of people on this waterfront, very hardworking people, whose livelihood depends on Carlos’s landings,” said Jon Mitchell, the mayor of New Bedford. “They don’t deserve to suffer along with him.”

Tony Fernandes, a captain on one of Mr. Rafael’s boats, said he was collecting unemployment benefits and waiting to learn when he may be able to fish again. “He’s putting in his time and he paid his fine,” he said of Mr. Rafael. “We are in limbo.”

For decades, Mr. Rafael, 65, was a blustery, polarizing figure along these piers. He called himself a pirate, and mocked smaller competitors as maggots or mosquitoes. When he wasn’t yelling into his phone in Portuguese, he held court around town, talking politics and fish. The authorities said he owned one of the country’s largest commercial fishing enterprises, and analysts estimate that he controlled about one-quarter of New England’s landings of groundfish. Mr. Rafael also had boats to harvest scallops, which now make up a much greater share of New Bedford’s total landings than groundfish do.

But Mr. Rafael also served as a dealer for the seafood that came off his boats, which prosecutors say made it easier for him to lie about what he was catching and how much he was getting for it.

“Carlos Rafael has been well known in the commercial fishing industry for 30 years,” said Andrew Lelling, the United States attorney for Massachusetts, who prosecuted the case. “And, for almost as long, federal law enforcement has heard rumors and concerns about Rafael acting illegally.”

Some people in New Bedford saw Mr. Rafael far differently — as a Robin Hood of sorts, with a pack of cigarettes and a dinged-up Silverado. He was a Portuguese immigrant who had started out cutting fish and eventually provided jobs for many people along a waterfront that has been bustling since Herman Melville immortalized its cobblestone streets and whaling ships in “Moby Dick.”

He saw an opportunity eight years ago when the government moved forward with a new regulatory system in New England, after Congress mandated that science-based limits be used to prevent overfishing. The cod catch, long a staple of New England’s economy, had fallen over the years.

Instead of the former approach of limiting how many days boats could spend at sea, the new regulations by the National Oceanic and Atmospheric Administration set specific ceilings on how many fish could be caught. The rules instantly were contentious, especially when regulators set low limits for dwindling species like cod to help them rebound.

Read the full story at the New York Times 

After criminal case, Carlos Rafael faces more losses

NOAA has yet to determine fines and penalties in civil case involving Carlos Rafael

October 16, 2017 — So far, New Bedford fishing mogul Carlos Rafael has lost a fraction of his fishing empire after pleading guilty to 23 counts of false labeling and identification of fish, as well as cash smuggling, conspiracy, falsifying federal records and tax evasion. He was found guilty and sentenced to nearly four years in jail last month.

But there could be millions more in fines and penalties as the National Oceanic and Atmospheric Administration decides what civil measures to impose on Rafael. Fishermen and environmental groups have been lobbying for that money to go toward restoring the fishery, and many would like to see it pay for better monitoring of what fishermen catch at sea and land on shore.

“We’re looking ahead to the civil phase and hope there will be some visibility (public input),” said Johanna Thomas, a senior director for the Environmental Defense Fund. “We agree that the money from (criminal) and civil cases go to funding the monitoring system.”

But how that happens is still a bit of a mystery.

At the time of his sentencing, U.S. District Court Judge William Young required that Rafael pay a $200,000 fine and $108,929 in restitution to the U.S. Treasury for the smuggled money and tax evasion. This past week, Young also determined that Rafael would forfeit four fishing vessels that participated in Rafael’s scheme to get around a lack of quota in certain species. Rafael also forfeited 34 of what Young termed “permits.”

Read the full story at the Cape Cod Times

Civil penalities from NOAA could be next for Carlos Rafael

October 13, 2017 — NEW BEDFORD, Mass. — Judge William Young’s judgment filed Wednesday appeared to be the finish line to Carlos Rafael’s case. Young, though, by ordering the forfeiture of four vessels and every permit associated with the Bull Dog, the Olivia and Rafaela, the Lady Patricia and the Southern Crusader II began a new ripple effect throughout the commercial fishing industry revealing some questions but very little answers.

It’s likely NOAA will take center stage now that the Department of Justice has closed its case. NOAA can bring civil penalties to Rafael.

The Environmental Defense Fund released a statement after Young’s ruling calling for NOAA to “pursue civil remedies to further aid the victims of Carlos Rafael’s crimes.”

They can range from fines to indefinite bans within commercial fishing.

NOAA issued indefinite bans to James G. Spalt and Peter Spalt, former Cape Cod scallopers, in 1996 to go with a more than $4 million fine. More than 20 years later, they remain outside the industry with no way to return.

The allegations levied toward the Spalt brothers included some of the same offenses Rafael pleaded guilty to, but also expanded beyond falsifying fishing quotas.

Read the full story at the New Bedford Standard-Times

Questions linger despite judge ordering forfeiture of Carlos Rafael permits

October 12, 2017 — News Bedford, Massachusetts — Carlos Rafael must forfeit four fishing vessels with an appraised value of $2.2 million and “34 permits” as ordered by District Judge William Young on Wednesday.

In a 16-page Memorandum and Order Concerning Forfeiture, Young described the methods he used in determining forfeiture, which includes the “Bull dog (eight permits)”, the “Olivia and Rafaela (11 permits), the “Lady Patricia (four permits)” and the “Southern Crusader II (11 permits).”

The number of permits the government will strip from Rafael is more complicated than what the court document indicates.

Read the full story at the New-Bedford Standard Times

Judge issues forfeiture order in Rafael case

WASHINGTON (Saving Seafood) — October 11, 2017 — Judge William G. Young of the U.S. District Court, District of Massachusetts, has released his order on the question of forfeiture in the Carlos Rafael case. 

The judge ordered Mr. Rafael to forfeit his 50 percent interest in four vessels in which his ownership stake is appraised at $2.2 million, and his half interest in 4 permits with 34 endorsements. The government had sought forfeiture of Mr. Rafael’s interest in 13 vessels. In the “Memorandum and Order Concerning Forfeiture” the judge outlined the Constitutional issues, case law, and sentencing guidelines limiting the magnitude of the forfeiture, stating “the government erroneously seeks to multiply the maximum fine by each of twenty-three counts of conviction for violations of the Lacey Act. That’s not how the guidelines work.”

He stated “a forfeiture sanction of $2,000,000+ in assets accords well with Rafael’s suggested $2,800,000 cash forfeiture. Rafael, of course, would agree to this cash forfeiture in a last ditch effort to save his fleet entire and, apparently, sell it as a whole. The government will not agree- it seeks the forfeiture of actual Vessels and Permits.”

He also noted that he “stayed away from the ‘Athena’ and the ‘Hera II’ because they have scalloping permits and scalloping is not involved in this wrong doing.”

The following summary is taken from the text of the order. The full order is available here.

The government sought forfeiture of 13 fishing vessels and permits.

Rafael owns the “Athena” outright and has a one—half interest in the remainder of the fleet. Based on the current market, the estimated gross value of the Vessels and Permits is approximately $30,000,000 and there are approximately $2,000,000 to $3,000,000 in liens and attachments on the Vessels and Permits, reducing the value of the Vessels and Permits to approximately $27,000,000 – $28,000,000.

The relevant statute mandates forfeiture.

Because Rafael violated the Lacey Act, and conspired to violate the Act, this Court must order forfeiture to the extent permitted by the Constitution.

The Eighth Amendment provides: “Excessive bail shall not be required, nor excessive fines imposed, nor cruel and unusual punishments inflicted.”

The court found:
1. Rafael falls into the class of persons to which the criminal statute was principally directed.
2. The requested forfeiture would not deprive Rafael of his livelihood.
3. The harm caused by the defendant was substantial.

After carefully calculating the sentencing guidelines as required by law, the Court derived a guideline range of not less than 51 nor more than 63 months imprisonment, a fine range of $20,000-$200,000, restitution of $108,929 supervised release from one to three years, and a mandatory special assessment of $2,800 ($100 on each of the 28 counts of conviction).

Following the principles set forth in 18 U.S.C. § 3553(a), with specific emphasis on the need for specific and general deterrence in light of Rafael’s extensive flouting of the fishery reporting regulations and the harm it caused, this Court sentenced him to 46 months in custody, three years of supervised release (with a special condition barring him from the fishing industry), a special assessment of $2,800, and a fine of $200,000, the maximum guideline fine provided for Rafael’s adjusted offense level.

…This Court in order to carry out the Congressional mandate must decree forfeiture to the full extent permitted by the Eighth Amendment. …the guidepost is relatively clear; the forfeiture must not be grossly disproportionate to the maximum fine under the sentencing guidelines.

The government erroneously seeks to multiply the maximum fine by each of twenty-three counts of conviction for violations of the Lacey Act. That’s not how the guidelines work.

United States v. Bajakajian, 524 U.S. 321, 334 (1998) makes clear that a forfeiture of 70 times the maximum fine is grossly disproportionate, nothing in United States v. Jose, 499 F.3d 105 (1st Cir. 2007) suggests that 4 times the maximum guidelines fine is the outer limit of proportionality.

The Court, accepting the appraisals and listing of permits found in Rafael’s Opposition to Forfeiture, Exhibit — seeks to maximize, within constitutional limits, the number of vessels and permits to be forfeited. I have stayed away from the “Athena” and the “Hera II” because they have scalloping permits and scalloping is not involved in this wrong doing.

By adhering to our present quasi-determinate form of sentencing Congress has at the same time limited its largely unfettered legislative power in the premises by delegating to the Sentencing Commission the power to set fine ranges and, by extension, the permissible scope of constitutional forfeiture. Moreover, a forfeiture sanction of $2,000,000+ in assets accords well with Rafael’s suggested $2,800,000 cash forfeiture. Rafael, of course, would agree to this cash forfeiture in a last ditch effort to save his fleet entire and, apparently, sell it as a whole. The government will not agree- it seeks the forfeiture of actual Vessels and Permits.

Accordingly, Carlos Rafael shall forfeit all right, title and interest he may have in the “Bull Dog” ($661,3505 – 8 permits), the “Olivia & Rafaela” ($458,550 – 11 permits), the “Lady Patricia” ($338,800 — 4 permits), and the “Southern Crusader II” ($800,150 – 11 permits), i.e. four fish boats with a total appraised value for Rafael’s interest of $2,258,850 and 34 permits.

Gloucester Times: Carlos Rafael case highlights failings of regulatory system

October 3, 2017 — Sometime early next month, Carlos Rafael is expected to report to a federal prison to begin serving a 46-month sentence for criminal conspiracy and tax evasion.

Rafael, the 65-year-old New Bedford-based fishing magnate, admitted to a judge earlier this year that he had lied to federal fishing regulators about the nature and size of his groundfish landings and bulk smuggling.

At sentencing last week, U.S. District Judge William G. Young rejected the argument from the man who liked to call himself “The Codfather” that the fraud was necessary to protect the jobs of his workers.

“This was stupid,” Young told Rafael. “This was a corrupt course of action from start to finish. It’s a course of action of extensive corruption designed to benefit you, to line your pockets. That’s what it is and that’s why the court has sentenced you as it has.”

Good for Young for handing down a stiff sentence (Rafael was seeking probation). The Codfather’s story, however, does not end here. His arrest and prosecution laid bare a broken regulatory and monitoring system.

Read the full editorial at the Gloucester Times

Constitutionality of seizing Carlos Rafael’s permits in question

September 27, 2017 — BOSTON –Judge William Young decided half of Carlos Rafael’s fate on Monday: The New Bedford fishing mogul was sentenced to 46-months in prison with three years supervised release and a $200,000 fine.

The other half, which Young continues to take under advisement, involves the 65-year-old’s 13 groundfish vessels and permits.

In court Monday, Young repeatedly questioned the constitutionality of the forfeiture, citing the excessive fines clause in the Eighth Amendment.

Young said courts with higher authority have heard and decided that fines exceeding four-times the maximum guideline are unconstitutional.

Regardless of how many permits Young orders to be forfeited, he made it clear he has no authority to decide what’s done with them.

NOAA’s guidelines call for the permits to be redistributed throughout the Northeast, which is why for months organizations and politicians have publicly called for redistribution or a deal that would remove Rafael from the industry. Many arguments focused on all 13, without consideration of a partial forfeiture.

Argument against redistribution

Allyson Jordan actually contributed to a portion of Rafael’s groundfish permits.

She sold two boats and four groundfish permits. Jordan said Maine’s fishermen had no interest in the permits until Rafael entered the picture.

“He bought permits and boats to make his business survive,” Jordan said. “I don’t believe they should be given back to the state of Maine. The state of Maine did nothing to help my industry, not to mention my business.”

“Everyone is coming out of the woodworks now,” Jordan said. “To be honest, they could have bought the permits.”

Support of redistribution

The Cape Cod Commercial Fishermen’s Alliance, which also manages the Cape Cod Fishermen’s Trust, also contributed to Rafael’s enterprise, but argued for redistribution of the permits as well as better monitoring.

According to Seth Rolbein, the director of the Cape Cod Fisheries Trust, Rafael acquired more nearly a million pounds of quota from the Trust.

From 2011 through 2015, the Trust leased 992,646 pounds of quota. The Trust has no records from 2010 and didn’t lease any to Sector IX after the U.S. Attorney released the indictment, tying Rafael to falsely labeling fish quotas.

“Our priority is to service our fishermen and our community,” Rolbein said. “If there are fish stock that our community is not using that we can not lease out at our subsidized rate to our own fishermen, we then will lease out to other sectors. The trust will lease fish to other sectors. But we will only do that once we’re satisfied that our own fishermen can’t use or don’t have use for that quota.”

What’s next?

The defense revealed Monday that Richard and Ray Canastra, of Whaling City Seafood Display Auction, have entered a Memorandum of Agreement to purchase Rafael’s entire fleet. Neither the U.S. Attorney nor NOAA have taken a final position on the sale.

Read the full story at the New Bedford Standard-Times

New England fishing council frozen until NOAA, judge done with Rafael

September 27, 2017 — GLOUCESTER, Mass. — There is no shortage of changes the National Oceanic and Atmospheric Administration could make to the way catch limits are regulated and enforced in the Gulf of Maine in the wake of the Carlos Rafael’s sentencing on Monday. But first it will take recommendations from the New England Fishery Management Council (NEFMC), and the 17-member panel this week put off staking out a position.

There is not yet a consensus in the group, which will wait to see how US District Court Judge William Young handles an argument over how much of Rafael’s fishing fleet will be seized by the federal government and what, if any, civil money penalties come from the National Oceanic and Atmospheric Administration before addressing the issue, said  John Quinn, NEFMC’s chairman.

“We’ve got a regulation in place and we’ve first got to see what and how that regulation is applied,” Quinn told Undercurrent News on Tuesday, during a break in the first day of the group’s three-day regular meeting at a hotel on the water here.

Young gave Rafael a 46-month prison sentence and ordered him to pay more than $300,000 in fines and penalties in a Boston federal court for misreporting nearly 783,000 pounds of fish between 2012 and early 2016, but he said he needed more time to consider the arguments made by prosecutors and Rafael’s defense team regarding an effort to seize his assets.

Read the full story at Undercurrent News

NEFMC to Review Carlos Rafael Sentence, Tuesday, September 26

September 26, 2017 — The following was released by the New England Fishery Management Council:

As many of you are aware, Carlos Rafael was sentenced today, September 25, 2017, in U.S. District Court in Boston.  The case reference is “United States of America v. Carlos Rafael No. 16-CR-10124-WGY.”  A press release describing the sentence was issued by the U.S. Attorney’s Office for the District of Massachusetts.  It is available at Rafael Sentencing.

The New England Fishery Management Council will review the sentence tomorrow morning, Tuesday, September 26, shortly after opening up its three-day meeting in Gloucester, MA at the Beauport Hotel.  Reappointed Council members will be sworn in, and the annual election of officers will be conducted before the Rafael case is discussed.

WEBINAR INFORMATION:  A webinar is available for this meeting.  Registration details can be found at webinar.  The agenda and meeting materials are at NEFMC.

THE SENTENCE:  The U.S. Attorney’s Office stated, “Carlos Rafael, 65, of Dartmouth, was sentenced by U.S. District Court Judge William G. Young to 46 months in prison and three years of supervised release, during which time he is banned from working in the fishing industry.  The Court also ordered Rafael to pay a fine of $200,000 and restitution to the U.S. Treasury of $108,929.  Rafael may also be subject to forfeiture of a portion of his fishing fleet, but the Court held that issue for further consideration.”

EXECUTIVE DIRECTOR’S COMMENT:  Immediately following the sentencing, New England Fishery Management Council Executive Director Tom Nies said, “Carlos Rafael is a criminal who stole from his fellow fishermen and the public by intentionally misreporting his catch.  His conduct was reprehensible and the criminal penalties he received are well-deserved.  We once again thank our government enforcement agencies for bringing him to justice.”

WHAT RAFAEL DID:  “From 2012 to January 2016, Rafael routinely lied to the National Oceanic and Atmospheric Administration (NOAA) about the quantity and species of fish his boats caught in order to evade federal quotas designed to guarantee the sustainability of certain fish species,” stated the U.S. Attorney’s Office.  “During that period, Rafael misreported to NOAA approximately 782,812 pounds of fish, telling NOAA that the fish was haddock, or some other abundant species subject to high quotas, when in fact the fish was cod, sole, or other species subject to strict quotas.  After submitting false records to federal regulators, Rafael sold much of the fish to a wholesale business in New York City in exchange for duffle bags of cash.  During meetings with the undercover agents, Rafael said that in his most recent dealings with the New York buyer he received $668,000 in cash.  Rafael smuggled at least some of that cash out of the United States to his native Portugal, hiding it there to evade federal taxation on that revenue.”

GUILTY PLEA:  The U.S Attorney’s Office stated, “In March 2017, Rafael pleaded guilty to one count of conspiring to commit offenses against the United States, 23 counts of false labeling and fish identification, two counts of falsifying federal records, one count of bulk cash smuggling, and one count of tax evasion.  He was initially arrested and charged in February 2016.  Rafael, the owner of Carlos Seafood Inc., based in New Bedford, Mass., owned 32 fishing vessels through independent corporate shells and 44 permits, which amounted to one of the largest commercial fishing businesses in the United States.”