Government Actions Archive

The Department of Justice announces the sentencing of Karen L. Blyth and David H. M. Phelps in federal court in Mobile, Ala., to 33 months and 24 months in prison, respectively.   The pair was also fined $5,000 each, and barred for three years from working in the seafood industry or owning any seafood related business.  Blyth and Phelps had been convicted in January 2011 of 13 felony offenses for their roles in purchasing and selling farm-raised Asian catfish and Lake Victoria perch falsely labeled as grouper, selling foreign farm-raised shrimp falsely labeled as U.S. wild caught shrimp, selling shrimp they falsely claimed to be larger, more expensive shrimp than they actually were, and for buying fish they knew had been illegally imported into the United States.   

“These significant sentences are appropriate penalties for Blyth and Phelps, who committed multiple felonies in conspiring to scam consumers with falsely labeled, cheaper fish substitutes from Asia and Africa,” said Ignacia S. Moreno, Assistant Attorney General for the Environment and Natural Resources Division of the Department of Justice.   “Their fraudulent scheme artificially deflated the cost of wild-caught fish, and gave them an unacceptable economic advantage over law abiding fisherman.”

“These prosecutions and the sentences that were imposed today should send a clear message that instances of consumer fraud will not be tolerated and that this U.S. Attorney’s Office will continue to aggressively protect local seafood consumers and all components of the local seafood market and industry,” said Kenyen R. Brown, U.S. Attorney for the Southern District of Alabama.

The Justice Department, along with National Oceanic and Atmospheric Administration, and the Florida Department of Agriculture and Consumer Services, announced the guilty plea by Richard Stowell, of St. Pete Beach, Florida, and United Seafood Imports, Inc., a firm located in St. Petersburg, Florida, to a twenty-four count Information, charging them with conspiring to commit violations of the Lacey Act and Food Drug and Cosmetics Act.

According to Court documents and statements made at the hearing, Stowell, who was the majority shareholder in United, in concert with Shifco, Inc. (Shifco), conspired to violate the Lacey Act and the Food Drug and Cosmetics Act by mislabeling and selling approximately one million pounds of shrimp. To execute the scheme, less marketable shrimp from Thailand, Malaysia, and Indonesia was misbranded and marketed as shrimp coming from Panama, Ecuador, and Honduras. According to documents in the Court file, the mislabeled shrimp, valued at between $400,000 and $1,000,000, was ultimately sold to supermarkets in the northeastern United States.

Sentencing for both Stowell and United is scheduled for July 15, 2011 before U.S. District Judge Ursula Ungaro. Shifco previously pled guilty on January 11, 2011, to related Lacey Act violations, and was sentenced on March 25, 2011.

The Justice Department, along with NOAA Fisheries Office of Law Enforcement, U.S. Immigration and Customs Enforcement, and Florida Fish & Wildlife Conservation Commission, announced that Van Bodden-Martinez, a Bahamian national residing in Palm Beach County, was arrested on a warrant issued as a result of his indictment by a federal Grand Jury for having imported and attempted to import into the U.S. fish and wildlife possessed and transported in violation of the laws of the Commonwealth of the Bahamas, in violation of the Lacey Act.

According to the indictment, on or about February 19, 2011, Bodden-Martinez attempted to import spiny lobster (Panulirus argus), queen conch (Strombus gigus), and yellowtail snapper (Ocyurus chrysurus), all of which had been harvested without first acquiring a permit to engage in fishing activities and in violation of the possession limits for each of the species set forth in the laws and regulations of the Bahamas.

If convicted on the charge, Bodden-Martinez faces a possible term of imprisonment of up to five years, a fine of up to $250,000, and a term of supervised release of up to three years.  An indictment is only an accusation and a defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.

The Department of Justice along with NOAA Fisheries Office of Law Enforcement, and U.S. Fish & Wildlife Service (FWS), announced that Rusty Anchor Seafood, of Key West, Inc., a Florida corporation with its principal place of business at Stock Island, Florida, pled guilty and was sentenced today in federal District Court in Key West for having conspired to receive, purchase, and transport quantities of lobster and finfish for resale and distribution in interstate commerce, without complying with Florida law regarding commercial harvest requirements, licensing provisions, and bag and trip limits essential to the lawful harvest, possession, and sale of saltwater products, in violation of the Lacey Act.

U.S. District Judge K. Michael Moore accepted Rusty Anchor’s plea and imposed sentence at the same hearing. Judge Moore imposed a criminal fine of $500,000, half payable immediately and the other half payable over a five year term of Court-supervised probation. Rusty Anchor must also implement a comprehensive Environmental Compliance Plan set out in the written plea agreement, which includes retaining the services of an independent auditor, acceptable to the United States, who will monitor training and operations over the course of the probation.

The Department of Justice announced the sentencing of Douglas Jay of Ferndale, Washington, was sentenced to a year in prison, two years of supervised release and a $347,202 community service payment for violating the Lacy Act.  For over a two year period, Mr. Jay had his employees falsely label Coho (Silver) salmon as the higher-valued Chinook (King) salmon. The estimated market value of the falsely labeled fish was in excess of $1.3 million.

The Department of Justice, along with NOAA Fisheries Office of Law Enforcement, and the U.S. Fish & Wildlife Service (FWS), announced that Rusty Anchor Seafood of Key West, Inc., a Florida corporation with its principal place of business in Stock Island, Key West, Florida, was charged in a criminal Information today with a conspiracy to receive, purchase, and transport quantities of lobster and finfish for resale and distribution in interstate commerce, without complying with Florida law regarding commercial harvest requirements, licensing provisions, and bag and trip limits essential to the lawful harvest, possession, and sale of saltwater products, in violation of the Lacey Act.  If convicted, Rusty Anchor faces a possible criminal fine of up to the greater of $500,000, or twice the pecuniary gain from the relevant criminal conduct, and a period of probation of up to five years. Arraignment is scheduled for Friday, April 1, 2011.

According to the Information, agents and employees of Rusty Anchor made 42 purchases, valued at more than $100,000, of spiny lobster from a single harvester, but concealed and did not report an additional $23,000 of lobster purchases over the daily allowable bag limit. In another instance, Rusty Anchor agents and employees allocated 27 separate purchases of finfish to a license purportedly held in the name of the company President, although no such license existed. In addition, the Information alleges that in January 2008, employees of Rusty Anchor purchased more than $500 of the restricted species black grouper from an unlicensed fisherman and concealed the illegal transaction by mislabeling the catch as Mahoua, an unregulated bait fish.

An Information is merely an accusation and the defendants are assumed innocent until proven guilty.

The Department of Justice, along with U.S. Immigration and Customs Enforcement, and U.S. Food and Drug Administration, announced the indictment of Yuri Izurieta and Anneri Izurieta, both of Miami, and Naver Trading, Corp., a Miami-based company on one charge of conspiracy to smuggle goods into the United States, and six counts of smuggling goods into the United States.  If convicted, the defendants face a maximum of five years’ imprisonment for the count of conspiracy, and a maximum of twenty years’ imprisonment for each count of smuggling.

According to the allegations in the indictment, over several years, the Izurietas and Naver Trading, Corp. repeatedly imported shipments of dairy products into the United States. These dairy products were released from the port into the custody of the Izurietas and Naver Trading, Corp., but the defendants were not authorized to sell and distribute the dairy products pending successful completion of an examination by the U.S. Food and Drug Administration (FDA).

The indictment alleges that the defendants knew that the FDA was concerned that Naver Trading, Corp.’s dairy products were potentially contaminated with harmful bacteria. The indictment also alleges that, in some instances, the defendants actually knew that the dairy products were in fact contaminated. Nonetheless, the defendants allegedly failed to return the merchandise for destruction as required and, on some occasions, even sold and distributed their dairy products.

An indictment is merely an accusation and a defendant is presumed innocent unless and until proven guilty.

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 resulted 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 resulted in guilty pleas in January.

Karen L. Blyth of Paradise Valley, Ariz., and David H.M. Phelps of Scottsdale, Ariz., pleaded guilty Jan. 24 in Mobile, Ala., 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 positive 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 , Fla. “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 , Fla. , pleaded guilty to one conspiracy 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 , Conn. , pleaded guilty to similar offenses 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 customers, including supermarkets and restaurants.

“Anti-dumping” duties went into effect on these kinds of fish in January 2003, after an investigation by the Department of Commerce established that this product was being sold in the United States at less than fair value, and therefore was injuring domestic catfish producers. In all, the defendants conspired to buy and falsely label some 283,500 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 residence 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 Department of Homeland Security's Immigration and Customs Enforcement participated in the searches.  

“With multiple wholesale fish businesses 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 evidence that needed to be assembled in order to prove the defendants' criminal conduct," said Wayne D. Hettenbach, one of the Department of Justice prosecutors in the case. "Such complexity does not deter us from pursuing those whose conduct harms the fishery and fishermen by artificially depressing prices for the real product, in addition to cheating consumers.”

A federal Grand Jury returned a 28-count indictment against all three defendants on Jan. 28, 2010 ( http://www.nmfs.noaa.gov/ole/news/news_sed_012810.htm ). The trial was set to begin Jan. 24, 2011, when Blyth and Phelps changed their pleas to guilty ( http://www.nmfs.noaa.gov/ole/news/news_SED_012411.htm ).

Popa's sentencing is set for Feb. 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.

“We will continue to investigate all false labeling and substitution of this country's fish and seafood, and work to protect fisheries 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 investigation 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 Environmental 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.

Background: Mislabeling a common problem

Two other southeast division investigations of mislabeling also concluded in January. On Jan. 12, defendant Mark Platt of Boca Raton , Fla. , and Shifco Inc. located in Hialeah , Fla. , 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 Indonesia , as being from Panama , Ecuador and Honduras . The shrimp had an estimated retail value of between $250,000 and $1 million.

On Jan. 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 ordered 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 imported the haddock from China . That haddock was re-boxed and re-labeled as “Product of USA” before selling it to a south Florida customer.

The mission of NOAA Office of Law Enforcement is to ensure compliance with the laws and regulations enacted to conserve and protect our nation's marine resources. To report a suspected violation, contact OLE's national hotline at 1-800-853-1964.

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The Department of Justice announced today that Karen L. Blyth and David H.M. Phelps pleaded guilty in federal court in Mobile, Ala., to 13 felony offenses for their roles in purchasing and selling farm raised Asian catfish and Lake Victoria perch falsely labeled as grouper; selling foreign farm-raised shrimp falsely labeled as U.S. wild caught shrimp, selling shrimp that falsely claimed to be larger, more expensive shrimp than they actually were; and for buying fish they knew had been illegally imported into the United States.  Blyth and Phelps were co-owners of Consolidated Seafood Enterprises, Inc. located in Phoenix and Reel Fish and Seafood, Inc. located in Pensacola, Florida.  Sentencing is set for May 4, 2011.  The pair could face penalties of up to 20 years in prison and a $250,000 fine.   A third defendant in the case, John J. Popa had previously pleaded guilty to similar offenses.  Popa is scheduled to be sentenced February 22, 2011.