All You Ever Wanted To Know About Illegal Fishing But Were Afraid To Ask

Henry David Thoreau said, “Many men go fishing all of their lives without knowing that it is not fish they are after.” According to the Department of Justice, a couple of commercial fishermen knew exactly what they were after when they broke laws related to labeling and record-keeping:  money.

Fishing is big business. According to the Nation Oceanic and Atmospheric Administration (NOAA), U.S. boats world-wide brought in 10.3 billion pounds of fish in 2011, which is valued at $5.6 billion. Domestically, U.S. boats brought in 9.9 billion pounds of fish, worth $5.3 billion. With all this money at stake, there’s going to be some fraud along the way.

Let’s take a look at two recent cases involving illegal fishing-related conduct.

Hey, That’s Not Red Snapper!

In the first recent case, the owner of a Chicago-area seafood distributor was sentenced for a misdemeanor violation of the Federal Food, Drug and Cosmetic Act (“FFDCA”), 21 U.S.C. § 301 et seq. The FFDCA allows the FDA to oversee the safety of food, drug and cosmetics. It prohibits “the introduction or delivery for introduction into interstate commerce of any food, drug, device, tobacco product, or cosmetic that is adulterated or misbranded.” Id. § 331(a). The statute provides for criminal penalties as well as civil fines. Id. § 333.

The owner of Gourmet Express Marketing, Inc., Patrick Bruno, pleaded guilty in April. In his guilty plea, Mr. Bruno admitted that over a four year period, he had sold mislabeled seafood. Specifically, he substituted cheaper fish (such as swai or perch) for more expensive fish (such as catfish or red snapper). In addition, he misstated the weight of the seafood he sold.

Mr. Bruno was sentenced to five years’ probation, with the first six months in home confinement, as well as a $100,000 fine. In a parallel civil case, he agreed to a civil consent decree that enjoined him and his company from future violations, required hiring a monitor to ensure compliance with the law and provided for specified damages for future violations.

Not a Fluke

In the second recent case, the operator a commercial fishing boat (Charles Wertz) and a fish dealer (C&O Ocean Fishery Ltd.), pleaded guilty to wire fraud and falsifying records. Mr. Wertz owns C&O. C&O had a federal fisheries dealer permit.

Under the Magnuson-Stevens Fishing and Conservation Management Act, states have certain “catch shares” for a kind of fish in a defined geographic area. For example, as the indictment noted, New York “is part of the Northeast Region for share allocation of fluke.”

The federal government sets the catch share but then each state sets a quota for commercial fishing vessels to keep within that share. New York set a daily weight limit on the amount of fluke that could be harvested. The weight limit would vary throughout the year as New York worked to keep the total amount harvested within the federal limit. So, according to the indictment, the daily limit varied in 2010 and 2011 to between 70 and 210 pounds.

To ensure that fishing vessels stay within these limits, the federal and state government impose reporting requirements. The vessels themselves must report the amount and type of fish caught and sold. NOAA also requires weekly electronic reports by fish dealers detailing the amount and type fish purchased. Discrepancies between these reports are often used to investigate possible fraud.

The government accused Mr. Wertz and his company of committing wire fraud by submitting false reports of the amount of fluke that had been harvested. The fraud allegedly grew over time with unreported amounts totaling 8,535 pounds in 2009, 13,180 pounds in 2010 and 14,180 pounds in 2011.

Mr. Wertz pleaded guilty earlier this month to one count of wire fraud for falsifying 137 dealer reports plus 70 fishing logs. C&O also pleaded guilty to one count of wire fraud. In the plea agreement, they agreed to pay between $480,000 and $516,000 in fines and forfeitures and to give up fishing permits and ownership of their vessel. C&O also agreed to shut down. Sentencing is scheduled for November.

This entry was posted in False statements, Plea Agreement, Sentencing, Wire Fraud and tagged . Bookmark the permalink.

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