Seafood Wholesalers Sentenced for Lacey Act Violations
The Justice Department has announced that seafood wholesalers Karen Blyth and David Phelps were sentenced to 33 months and 24 months in prison, respectively, for violating the Lacey Act, etc. A third defendant charged in the case, John Popa had previously pleaded guilty to similar offenses, and is scheduled to be sentenced on May 26, 2011.
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(Blyth was the co-owner and president of two companies, Consolidated Seafood Enterprises Inc., located in Phoenix, AZ and Reel Fish and Seafood, Inc., located in Pensacola, FL, which traded in a variety of seafood products. Popa managed and co-owned Reel Fish with Blyth and Phelps and served as the company’s vice president. Blyth and Phelps were also fined $5,000 each, and barred for three years from working in the seafood industry or owning any seafood related business. )
Blyth & Phelps Were Convicted for Violating Lacey Act, Mislabeling, Etc.
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 U.S.
Prior to trial, Blyth and Phelps pleaded guilty to the offenses, which included one conspiracy count, nine violations of the Lacey Act, two counts of receiving smuggled goods and one count of misbranding.
Knowingly Bought Falsely Declared Frozen Fillets to Avoid Paying AD Duties
The defendants used Consolidated Seafood to buy frozen fillets of a type of farm- raised catfish from Vietnam within the genus Pangasius, called sutchi, that they knew had been imported into the U.S. and falsely declared as wild caught sole, in order to avoid antidumping duties that were owed on this product1. In all, the defendants conspired to falsely label and buy approximately 283,500 pounds of farm-raised sutchi, which was imported without $145,625 of AD duties having been paid.
Also Mislabeled Perch to Sell at Higher Cost
Blyth and Phelps also were sentenced for buying over 25,000 pounds of Lake Victoria perch from Africa, mislabeling and selling this fish as grouper and snapper to customers in Alabama and Florida at a higher cost, and in greater quantities than if it had been accurately labeled.
Some Fish Contained Prohibited Chemical and Antibiotic
Some of the fish seized during the investigation tested positive for malachite green and Enrofloxin, both of which are prohibited from use in U.S. food. Malachite green is a chemical compound often used in overseas fish farming, and Enrofloxin is an antibiotic used in some foreign fish farming but for which there is zero tolerance by the Food and Drug Administration in food sold in the U.S.
The defendants ultimately received 81,000 pounds of this illegally imported sutchi, and sold 34,100 pounds of it to Reel Fish, which in turn sold it to customers in Alabama, Florida and elsewhere.
The defendants changed the marking on this sutchi and other imported basa to grouper, and sold it to customers in Alabama, Florida and Mississippi as more desirable grouper, at a higher cost. The defendants sold over 100,000 pounds of this falsely labeled basa and sutchi to these customers.
Defendants Conspired to Mislabel & Create False Labels for Shrimp
The defendants also conspired to mislabel and create false labels for shrimp they sold to customers in these areas. The defendants, through Reel Fish, would repackage farm raised foreign shrimp as U.S. wild caught shrimp. The defendants would also falsely label the shrimp as being larger than they were. By falsely labeling the shrimp in these manners, the defendants were able to sell more and charge more for the shrimp that they sold.
1AD duties went into effect on frozen fillets of sutchi, basa and swai in January 2003, after an investigation by the Department of Commerce established that this product was being sold in the U.S. at less than fair value and were therefore injuring domestic catfish producers. (See ITT's Online Archives or 08/13/03 news, 03081335, for BP summary of the ITA's issuance of the AD duty order on frozen fish fillets from Vietnam.)
(See ITT’s Online Archives or 01/25/11 news, 11012501, for BP summary of Blyth and Phelps pleading guilty in this case.)