Seafood Executives Plead Guilty to Selling Mislabeled Fish
Shortly before a trial that was to begin in Mobile, Alabama, two executives from an Arizona based seafood wholesaler, Consolidated Seafood Enterprises, pled guilty to a scheme to defraud the public by mislabeling imported fish. The plea agreement of one of the defendants may be viewed here.
Consolidated Seafood Enterprises contracted with importers to bring in fish from overseas and then sell them to wholesalers that supplied restaurants and stores. Both executives admitted that they bought and sold approximately 385,000 pounds of frozen catfish, called basa, swai and sutchi, which was falsely labeled to evade customs duties. They then passed 101,000 pounds off as grouper to customers in southern states including Alabama and Florida. They sold 25,000 pounds of Lake Victoria Perch as grouper or snapper. The defendants also admitted to overstating the size of shrimp they sold and falsely labeling them as wild caught from the U.S., when in fact they were from shrimp farms in foreign countries.
Under the terms of the plea agreement, one executive Karen Blyth, will serve 2 years and 9 months in prison, while her co-defendant, David Phelps will serve 2 years in prison. The defendants also agreed to the forfeiture of over 7,000 pounds of fish. The Court will determine the amount of fine and both executives will not be able to hold ownership or managerial interests in the seafood industry until after they serve 3 years of supervised release after completing their prison sentences. The Court accepted the plea agreement on January 24, 2011.
The mislabeling of food products is a violation of the Food, Drug & Cosmetic Act, and the Lacey Act, while submitting false statements to Customs to evade duties is a violation of Title 18 of the Criminal Code. Fuerst Ittleman lawyers have substantial experience representing clients involved in both the distribution and importation of food products who are under federal criminal investigation for violations of these laws.