Page 12. MAINE COASTAL NEWS March 2011 Commercial Fishing News


NOAA Investigations Into Mislabeling Seafood Protects Consumers and Fisher- men


MISCELLANEOUS COMMERCIAL FISHING NEWS


Defendants plead guilty in federal court to violating the Lacey Act


Seafood consumers and the law-abiding fishermen who catch that seafood gained a big victory last week when a complex NOAA Office of Law Enforcement investigation into conspiracy, misbranding and smuggling re- sulted in two guilty pleas in federal court. This case is the latest of three Lacey Act investigations in NOAA Office of Law Enforcement’s southeast division that re- sulted in guilty pleas in January. Karen L. Blyth of Paradise Valley, AZ, and David H.M. Phelps of Scottsdale, AZ, pleaded guilty January 24 in Mobile, AL, to 13 felony offenses for their roles in purchasing and then re-selling farm-raised Asian catfish and Lake Victoria perch falsely labeled as grouper, sole or snapper; selling foreign farm-raised shrimp falsely labeled as U.S. wild caught shrimp and selling shrimp that falsely claimed to be larger and more expensive than they actually were; and for buying fish they knew had been illegally imported into the United States. Some of the fish tested posi- tive for malachite green and Enrofloxin, both of which are considered health hazards and banned from U.S. food products. The Lacey Act makes it unlawful for a person to falsely identify any fish that has been, or is intended to be, imported, sold, purchased or received from any foreign country or transported in interstate or foreign commerce.


“People save their money all year long to come on vacation down here and take their families to restaurants. They want a grouper


sandwich or a grouper basket, which is what this area is known for, and they were getting cheated out of it,” said assistant special agent in charge Gregg Houghaboom, who was the lead case agent out of Niceville, FL. “This kind of illegal activity also deflates the price of grouper in the Gulf of Mexico. We are doing what we can to protect the honest grouper commercial fishermen and level the playing field for them.”


The defendants, who were co-owners of Consolidated Seafood Enterprises Inc., in Phoenix and Reel Fish and Seafood Inc., in Pensacola, FL, pleaded guilty to one con- spiracy count, nine violations of the Lacey Act, two counts of receiving smuggled goods and one misbranding count. A third defendant charged in the case, John J. Popa, of Lisbon, CT, pleaded guilty to similar of- fenses in August. He managed and co- owned Reel Fish with Blyth and Phelps. Both businesses are now closed. The investigation started in June 2005 when NOAA’s Office of Law Enforcement agents discovered Consolidated Seafood bought Vietnamese catfish illegally imported into the U.S. labeled as sole, then distributed it to Reel Fish, which in turn distributed the catfish as grouper and sole and sold it to approximately 65 different wholesale cus- tomers, including supermarkets and restau- rants.


“Anti-dumping” duties went into effect on these kinds of fish in January 2003, after an investigation by the Department of Com- merce established that this product was be- ing sold in the United States at less than fair value, and therefore was injuring domestic catfish producers. In all, the defendants con- spired to buy and falsely label some 283,500


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pounds of farm-raised Vietnamese catfish, which was imported without $145,625 of anti- dumping duties being paid.


Reel Fish also bought Lake Victoria perch and re-labeled it as the more expensive grouper or snapper, and marketed those to higher-end restaurants in Alabama and Florida; took foreign-bought shrimp and re- labeled it as product of the United States; and took expired oysters and re-dated their tags. The investigation led to simultaneous search warrants in April 2006 at Blyth’s resi- dence and Consolidated Seafood in Arizona, Reel Fish in Florida, and at another seafood wholesaler in Seattle. More than a dozen special agents from NOAA’s Office of Law Enforcement as well as agents from the De- partment of Homeland Security’s Immigra- tion and Customs Enforcement participated in the searches.


“With multiple wholesale fish busi- nesses involved, as well as the large scale and varied nature of the product false labeling schemes, there was an unusually large amount of documentary and testimonial evi- dence that needed to be assembled in order to prove the defendants’ criminal conduct,” said Wayne D. Hettenbach, one of the De- partment of Justice prosecutors in the case. “Such complexity does not deter us from pursuing those whose conduct harms the fishery and fishermen by artificially depress- ing prices for the real product, in addition to cheating consumers.”


A federal Grand Jury returned a 28-count indictment against all three defendants on January 28, 2010. The trial was set to begin January 24, 2011, when Blyth and Phelps changed their pleas to guilty.


Popa’s sentencing is set for February 22, while Blyth’s and Phelps’ are set for May 4. The maximum penalty for each violation of the Lacey Act includes up to five years in prison and a $250,000 fine, while the maximum penalty for each misbranding count includes to up to three years in prison and a $250,000 fine.


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“We will continue to investigate all false labeling and substitution of this country’s fish and seafood, and work to protect fisher- ies in the Southeast region and the American consumer, from being harmed by this kind of criminal activity,” said Hal Robbins, special agent in charge of NOAA Office of Law Enforcement’s southeast division. Other agencies participating in the in- vestigation include the U.S. Air Force Office of Special Investigations and the Department of Defense, Defense Criminal Investigative Service. The case was prosecuted by Hettenbach and Susan L. Park of the Environ- mental Crimes Section of the Department of Justice Environment and Natural Resources Division, and Deborah A. Griffin of the U.S. Attorney’s Office for the Southern District of


Alabama. Mislabeling a common problem


Two other southeast division investiga- tions of mislabeling also concluded in Janu- ary. On January 12, defendant Mark Platt of Boca Raton, FL, and Shifco Inc. located in Hialeah, FL, pleaded guilty to four counts of conspiring to commit Lacey Act violations. From January through February 2010, Platt, Shifco and Northern Fisheries Ltd. engaged in a scheme through which Platt oversaw the false repackaging and labeling of 1,500 pounds of frozen chum salmon fillets. The fillets, which were a “Product of China,” were re-labeled as being chum salmon fillets, “Product of Russia.” In addition, Platt and Shifco pled guilty to a scheme to re-label more than a million pounds of less marketable shrimp from Thailand, Malaysia, and Indone- sia, as being from Panama, Ecuador and Hon- duras. The shrimp had an estimated retail value of between $250,000 and $1 million. On January 20, in an unrelated case, MKG Provisions Inc., of Miami, pleaded guilty and was sentenced to one year of probation intended to provide oversight of the company’s implementation of a plan to prevent recurrence of the offense and or- dered to pay a $20,000 criminal fine, for one count of violating the Lacey Act by mislabeling imported haddock. In June 2010, MKG purchased 10,600 pounds of haddock from a Boston-area supplier that had im- ported the haddock from China. That had- dock was re-boxed and re-labeled as “Prod- uct of USA” before selling it to a south Florida customer.


Commerce, NOAA Release Draft National Aquaculture Policies, Invite Public Comment


The Department of Commerce and Na- tional Oceanic and Atmospheric Administra- tion (NOAA) released complementary draft national aquaculture policies that support sustainable marine aquaculture to increase the U.S. supply of healthy seafood, create jobs in coastal and other communities, spur innovation in technology, and help restore depleted species and marine habitats. Marine aquaculture is the farming of marine organ- isms such as shellfish, finfish, and algae for food, habitat restoration, and rebuilding of wild fish stocks. The public is invited to comment on both draft policies for the next 60 days.


“Americans love seafood, and we con- sume approximately 5 billion pounds of it each year—a significant portion of which are imports. In fact, our current trade deficit is approximately $9 billion,” Commerce Secre- tary Gary Locke said. “Supporting the U.S. aquaculture industry will encourage eco- nomic growth and employment opportuni- ties at home, support exports to global mar-


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