November 1, 2017 (Saving Seafood) — The government prosecution in the Carlos Rafael case has filed notice that they are appealing Judge Young’s decision on forfeiture to the United States Court of Appeals for the First Circuit, as well as Judge Young’s memorandum denying the government’s motion for reconsideration.
For more information on the Carlos Rafael verdict:
Judge denies feds’ motion for Carlos Rafael to forfeit more vessels, permits
October 26, 2017 — NEW BEDFORD, Mass. — Judge William Young didn’t waste any time denying the United States’ motion for reconsideration in the case of Carlos Rafael.
The government filed the reconsideration on Wednesday, the same day Young filed his judgment.
The government sought Young to reconsider the forfeitability of Rafael’s vessels and permits.
Young ordered four vessels and the accompanying permits to be forfeited on Oct. 11. U.S. Marshals seized the vessels the Lady Patricia, Olivia & Rafaela and the Southern Crusader II on Oct. 18.
The reconsideration stated, “the court may correct a sentence that resulted from arithmetical, technical or other clerical error” within 14 days. The government, again, is seeking Rafael to forfeit all 13 vessels and permits associated with his guilty plea to 28 counts of falsifying fishing quota, bulk cash smuggling and tax evasion.
Read the full story at the New Bedford Standard-Times
October 27, 2017 — SEAFOOD NEWS — Commercial fishing mogul Carlos “The Codfather” Rafael pled guilty for violations of the Lacey Act, but now Congressman Raúl M. Grijalva and Congresswoman Chellie Pingree want the Department of Justice to penalize him for violations of the Magnuson-Stevens Fishery Conservation and Management Act (MSA).
Grijalva and Pingree sent a letter on Thursday to Secretary of Commerce Wilbur Ross and Department of Justice Attorney General Jeff Sessions seeking for the forfeiture of assets and permits that are not “directly linked to a specific crime.”
“We are writing today to follow up on a letter sent September 21, 2017 regarding Carlos Rafael, the leader of a massive illegal fishing operation in New England, reads the letter. “While Rafael pled guilty to violations of the Lacey Act and was recently sentenced to 46 months in prison, the judge bizarrely rejected the government’s recommendation that Rafael forfeit all 13 vessels involved in the crimes, instead requiring the forfeiture of only four vessels and 34 permits and levying a much lower fine than the government had recommended. We want to thank the Justice Department for its recent motion asking the court to reconsider the ruling, including the level of the fines.”
The letter goes on to state that it’s “unacceptable” to allow Rafael to “maintain the ability to transfer or sell millions of dollars worth of assets.” Although Rafael can no longer participate in the fishery, he still has a reported 27 fishing vessels, as well as an assortment of permits.
“Congress gave the Secretaries clear authority to completely remove bad actors from the fishing industry,” Grijalva said in a press release. “If they don’t use the authority here, it will send a clear signal to Codfather wannabees that the Magnuson Act is a joke. This administration claims to be all about law and order – this is a chance to prove it.”
The letter comes just as William D. Weinreb, acting United States Attorney for the District of Massachussetts, filed a motion to reconsider the forfeiture of Rafael’s vessels.
This story originally appeared on Seafoodnews.com, a subscription site. It is reprinted with permission.
October 26, 2017 — BOSTON — A Massachusetts sheriff’s office captain has been indicted on charges he helped a fishing magnate known as The Codfather smuggle profits of an illegal fishing scheme to Portugal.
The U.S. attorney’s office for Massachusetts says Jamie Melo was indicted by a federal grand jury on Wednesday on charges of bulk cash smuggling, structuring and conspiracy. The Bristol County sheriff’s office captain was arrested in August.
October 20, 2017 — BOSTON — More than 14 years after a barge spilled 98,000 gallons of oil into Buzzards Bay, state and federal officials have announced a proposed settlement that would require the transportation company in charge of the vessel to pay more than $13 million for the damage done to migratory birds and their habitats.
In April 2003, a Bouchard Transportation Co. barge traveling to the power plant on the Cape Cod Canal in Sandwich struck rocks south of Westport. The crash ruptured the barge’s hull and spilled thousands of gallons of oil into the bay, damaging salt marshes, beaches, and hundreds of birds such as loons, sea ducks, terns and shorebirds.
The settlement proposal by the U.S. Fish and Wildlife Service, the National Oceanic and Atmospheric Administration, and the states of Massachusetts and Rhode Island was filed in U.S. District Court, where it must be approved before being finalized.
If the settlement is approved, it would bring the total amount of money paid to resolve claims filed by the Natural Resource Damages Trustee Council, a group composed of several state and federal agencies, up to $19 million. Bouchard previously paid $6 million for claims on shoreline resources, piping plovers, and other damage recovery efforts.
October 20, 2017 — SEAFOOD NEWS — What happens next with Carlos Rafael’s fishing permits for all 13 vessels, including those that were not forfeited under the courts order, will be determined in a civil proceeding by NOAA with an administrative law judge.
The criminal proceeding led to forfeit of 34 permits. NOAA will have to address what will be done with these. But the remaining nine vessels owned by Rafael have dozens, perhaps over 100 individual fishing permits. If NOAA revokes these permits in an administrative proceeding, the value of the vessels themselves will fall substantially.
Prior precedent, and a full review of NOAA enforcement actions in 2012 by a Special Master, Charles Swartwood, suggests that NOAA is fully entitled to permanently revoke all fishing permits associated with the 13 vessels where Carlos Rafael has pled guilty to deliberately falsifying catch records.
Prior to Rafael, the largest fisheries fraud case in New England involved James and Peter Spalt.
In 1995 NOAA charged that the two brothers directed the illegal fishing on the five vessels they owned, purchased the illegally harvested fish and scallops through their fish dealership, and then continued to hide the illegal activity by routinely falsifying the mandatory reports they submitted to federal fisheries authorities.
Altogether six companies, five vessels and 12 individual vessel captains were involved in the scheme.
NOAA sought more than $5 million in civil penalties, and the complete revocation of all fish permits. This was a civil case, without a criminal component.
The administrative law judge upheld a combined civil penalty of $4,325,000. and revoked the dealer permit of Cape Spray Fisheries, and ALL federal fishing permits of the five vessels involved in the scheme.
The Spalt brothers appealed the case to the NOAA administrator, who upheld the decision.
They then appealed to the US District Court, and his lawyers filed complaints that NOAA enforcement violated the Fourth, Fifth, and Ninth Amendments of the United States Constitution of Liberty Food Corporation, Cape Spray Fisheries, and James, Kristen, and Peter Spalt.
The case was finally settled prior to a final judgement by the US district attorney’s office in 1998. The settlements stipulated first, that Atlantic Spray Corporation and Hudson Corporation would surrender all of their federal vessel permits and sell the vessels involved to pay a settlement. A second settlement involving seizure of scallops stipulated that they also agreed to cease all federal and state fishing permits on all their corporations and vessels, including the latent permits owned by Albatross Corporation and Dutchman Corporation. The Spalts also relinquished their federal operator permits and must cease commercial fishing entirely in state and federal waters
The settlement did lead to a substantial reduction in the administrative fine, from NOAA’s final offer of $2.5 million to about $1.5 million, but NOAA’s proceeds from the sale of seized scallops were retained as well.
Thirty months after signing the Settlement Agreement, the Spalts requested to re-enter the federal fisheries. However, NOAA declined to grant the Spalts a federal operator’s permit. The Spalts later sought relief in the United States District Court concerning the above provision. In the end, the Court held that NOAA’s denial of the Spalt’s fishing permit applications did not violate the terms of the Settlement Agreement.
The validity of this enforcement action was reviewed as part of a thorough investigation into NOAA fisheries enforcement in the Northeast by the Dept. of Commerce in 2012. The investigation involved the appointment of a special master, who reviewed all of NOAA’s enforcement actions in the Northeast.
In the review, the special master found a number of cases where NOAA unfairly pursued aggressive sanctions for fisheries violations, and also found that the enforcement branch operated what amounted to a slush fund with some of the fines and penalties assessed.
Yet in regards to the case against the Spaltz brothers, and in particular the full seizure of fishing permits and the denial of the right to get a federal fishing permit in the future, the special master found NOAA had acted appropriately.
He said “Based on an evaluation of the totality of the circumstances and evidence in this case, I cannot find by clear and convincing evidence that NOAA exercised broad and powerful enforcement authority that prejudiced the outcome, in any respect, or unfairly forced a settlement.“
The arguments by NOAA in this case were very similar to the arguments used against Rafael’s violations, in that the complete disregard for reporting and illegally taking species against a quota undermined the operations of the entire New England fishery.
The major difference between the 1990’s case and the case against Carlos Rafael is that a new management scheme is in place that allocates quota to specific coops and vessels. This has resulted in a premium value on certain choke species so that when Rafael illegally misreported his take of these ‘choke’ species, he gained an economic advantage over other fishermen who were forced to cease fishing.
In the 1990’s, the damage was to the regulation of the entire fishery, but without reference to the economic harm the Spaltz’s illegal activity did to other harvesters.
On review, the full revocation of the permits in that case was upheld through various US court proceedings, NOAA administrative proceedings, and a review by a special master who investigated possible overreach by NOAA enforcement. At no time did a competent authority assert that the full revocation of the fishing permits was excessive, undeserved, or without merit.
On balance, NOAA has a stronger case this time for a complete revocation of permits. Once again, failure to do so under its administrative powers will cripple NOAA’s ability to enforce fishery management rules in New England.
This story original appeared on Seafood News, a subscription site. It is reprinted with permission.
October 20, 2017 — A federal judge sentenced a former Bristol County sheriff’s deputy Thursday to a year in prison and three years of supervised release for smuggling thousands of dollars in profits to Portugal for a Massachusetts fishing magnate who was trying to dodge fishing rules, prosecutors said.
Antonio Freitas, a longtime task force officer with US Immigration and Customs Enforcement, smuggled $17,500 through airport security in February 2016, according to a statement from the US attorney’s office in Boston. Freitas, according to the statement, later deposited that money in a Portuguese bank account belonging to Carlos Rafael, a New Bedford commercial fishing mogul known as the “Codfather.”
Read the full story at the Boston Globe
October 19, 2017 — SEAFOOD NEWS — Three additional documents have emerged as part of the lawsuit filed against the US Commerce Department that appear to show an intent to end-run normal channels of public comment and regulated processes for regional council activities, only to serve the needs of the sportfishing industry.
The lawsuit, filed by Ocean Conservancy and the Environmental Defense Fund last July, focused on mismanagement of the Gulf Red Snapper fishery, but documents released last week show the recreational industry expects a level of allowance that flies in the face of the legal requirements of the Magnuson Stevens Act, and the processes for managing fisheries that is contained within it.
The documents are part of a 70-page package submitted by the government in response to the plaintiff’s lawsuit. They show clear intent to receive special treatment when it comes to taking more of the annual catch, and broader influence on choosing who sits on the regional management councils, a process specified by the Magnuson-Stevens Act (MSA) which is poised for reauthorization in 2018.
Moreover, in at least three instances, Department of Commerce employees, after briefing sports industry stakeholders on the requirements of MSA, go on to suggest various legislative — not regulatory — “fixes” for breaking the rules with the red snapper action.
Indeed, the documents point to a blurred state of authorities and influence wielding between the Commerce Department and the US Congress. Whether it is a beleaguered agency’s attempts to protect its standing among Gulf states or an intentional violation of the law remains unclear, but no one is disputing that the regulations within MSA are clear, and have, in the case of red snapper, been ignored.
A letter to commerce secretary Wilbur Ross from Ben Speciale, president of Yamaha Marine Group, was sent on April 3, less than a week after Ross met with Speciale, Mike Nussman, Scott Deal and Pat Murray to discuss the need for a National Oceanic and Atmospheric Administration (NOAA) fisheries administrator who had experience with the recreational sector. Chris Oliver was hired as head of NOAA Fisheries two and a half months later.
Nussman is the president of the American Sportfishing Association, Deal is from Maverick Boats and Murray is from the Coastal Conservation Association.
Ross posed questions to the group and asked them to respond later. One topic that may have been brought up — Ross certainly raised it frequently during his confirmation hearing and in separate interviews following his confirmation — was ways to reverse the seafood imbalance of trade.
It was a topic Speciale responded to in his April 3 letter to Ross.
“We support imposing assessments on imported seafood based on the country of origin’s management program,” wrote Speciale. “We believe this will help level the playing field and allow our domestic commercial fishermen to increase revenue without increasing their landings. We also support efforts to promote aquaculture….and we must not forget that all recreational landed fish are consumed in the US,” Speciale pointed out.
“Promoting recreational fishing is a conservation-minded way of increasing the consumption of US-caught fish,” he wrote.
Speciale did not elaborate on the ramifications of increased per capita consumption coming from sports landings and the impact on sustainably managed populations of fish.
Speciale’s first request was about more red snapper for Gulf of Mexico anglers.
“…we must return to a recreational red snapper season of no less [than] the 60 days for the 2017 and 2018 seasons,” he wrote.
“I understand that the Gulf of Mexico Fishery Management Council and the regional administrator for NOAA Fisheries in the southeast region will present obstacles to this initiative, but they must be overcome so that we may restore a sense of fairness for recreational anglers.”
Speciale continued: “Excessive precaution and fear of frivolous litigation from the environmental industry has created a massive bureaucrat roadblock that has been unfair to anglers and stifled our industry.
“We ask that you overcome these obstacles at the regional fishery management councils and Regional Administrators’ Offices.”
Speciale’s second request was to appoint a person within the Office of Policy and Strategic Planning (currently headed up by Earl Comstock) to have direct oversight on all regional fishery management council appointments. Further, that every appointment should be made only after coordinated consulting with the recreational industry.
Finally, Speciale asked for NOAA Fisheries to adopt a long-term strategy to increase public access to state and federal waters and “eliminate any management effort or technique that attempts to privatize federal fisheries, which are and should remain a public resource.”
Almost two months later, as the red snapper season caught its quota in a matter of days, Shannon Cass-Calay, Chief of the Gulf and Caribbean Branch of the Sustainable Fisheries Division at NOAA Fisheries’ Southeast Fisheries Science Center ran the numbers on what the impact a 45-day extension would have on the red snapper stock in the gulf.
She sent a summary of the research to five of her colleagues, asking them to consider it, emphasizing the uncertainties in the data, and warning that an extended season “…will very likely cause catches to exceed OFL (Over Fishing Limit) and delay recovery by 4-6 years. Each additional overage will degrade the condition of the stock further.”
The final dissemination of that memo is not known, but it must have reached Earl Comstock, because he referenced it in one of two memos to Secretary Ross in early June.
After consulting with all five gulf state fisheries managers, Comstock asked Ross if he could move ahead on crafting an extension to the red snapper season. At the bottom of his first memo to Ross, dated June 1, Comstock hand wrote “Secretary said go with two days plus holidays. OK to proceed.”
On June 7, Comstock sent a memo to Ross preparing him for a hearing on appropriations where Senator Shelby (R-AL) may ask Ross about the gulf snapper issue. He also presented two options for the extension and asked Ross to pick one.
“As discussed, under either option the increased angler catch will result in the overall catch limit for this year being exceeded by 30% and 50%,” Comstock explained to Ross. “Either option would mean that, absent Congressional action to modify the Magnuson-Stevens Act requirements for the gulf, the recreational season next year would be significantly reduced. All the state fishery managers know this, but agree the coordinated action has the greater long-term benefit,” Comstock wrote.
He acknowledged that either option will be opposed by commercial fishermen and charter operators, and “it will almost certainly draw a lawsuit.”
Comstock noted that any plaintiffs in a suit “cannot get a temporary restraining order because the Magnuson-Stevens Act prohibits them. However, they might be able to get an injunction based on the argument we are violating a recent court order that stopped a 2% reallocation from commercial to recreational that the Gulf Council had adopted,” he wrote.
A third new document appears to depict a National Marine Fisheries Service administrator suggesting work arounds for an action that would be in direct violation of MSA. It’s a memo from Harry Blanchet, Biologist Administrator of the Fisheries Division, Louisiana Department of Wildlife, to John Searle, the Congressional staffer to Louisiana Representative Steve Scalise. Searle had been in discussions with the state fisheries department regarding the red snapper situation.
Blanchet, who also sits on the Gulf Council’s Science and Statistical panel, warned Scalise that “recreational red snapper harvest for 2017 may well overrun the recreational allocation by a substantial amount, and as a result, overall harvest may overrun the total allowable catch.”
Blanchet, like those before him, warned Searle that, “historically, and required by Magnuson, those over-runs would have to be paid back in following years, resulting in even lower recreational quota and thus federal seasons,” he told Seale.
Blanchet’s solution was a waiver.
“My thought was that a simple waiver of those Magnuson requirements in another bill in the current Congress could help a lot in terms of allowing there to be a federal waters recreational red snapper season in 2018. I understand that you may want to do a lot more, but just want to be sure that those payback provisions to not come back to bite next year,” he wrote.
This story originally appeared on Seafood News, a subscription site. It is reprinted with permission.
NOAA has yet to determine fines and penalties in civil case involving Carlos Rafael
October 16, 2017 — So far, New Bedford fishing mogul Carlos Rafael has lost a fraction of his fishing empire after pleading guilty to 23 counts of false labeling and identification of fish, as well as cash smuggling, conspiracy, falsifying federal records and tax evasion. He was found guilty and sentenced to nearly four years in jail last month.
But there could be millions more in fines and penalties as the National Oceanic and Atmospheric Administration decides what civil measures to impose on Rafael. Fishermen and environmental groups have been lobbying for that money to go toward restoring the fishery, and many would like to see it pay for better monitoring of what fishermen catch at sea and land on shore.
“We’re looking ahead to the civil phase and hope there will be some visibility (public input),” said Johanna Thomas, a senior director for the Environmental Defense Fund. “We agree that the money from (criminal) and civil cases go to funding the monitoring system.”
But how that happens is still a bit of a mystery.
At the time of his sentencing, U.S. District Court Judge William Young required that Rafael pay a $200,000 fine and $108,929 in restitution to the U.S. Treasury for the smuggled money and tax evasion. This past week, Young also determined that Rafael would forfeit four fishing vessels that participated in Rafael’s scheme to get around a lack of quota in certain species. Rafael also forfeited 34 of what Young termed “permits.”
October 13, 2017 — NEW BEDFORD, Mass. — Judge William Young’s judgment filed Wednesday appeared to be the finish line to Carlos Rafael’s case. Young, though, by ordering the forfeiture of four vessels and every permit associated with the Bull Dog, the Olivia and Rafaela, the Lady Patricia and the Southern Crusader II began a new ripple effect throughout the commercial fishing industry revealing some questions but very little answers.
It’s likely NOAA will take center stage now that the Department of Justice has closed its case. NOAA can bring civil penalties to Rafael.
The Environmental Defense Fund released a statement after Young’s ruling calling for NOAA to “pursue civil remedies to further aid the victims of Carlos Rafael’s crimes.”
They can range from fines to indefinite bans within commercial fishing.
NOAA issued indefinite bans to James G. Spalt and Peter Spalt, former Cape Cod scallopers, in 1996 to go with a more than $4 million fine. More than 20 years later, they remain outside the industry with no way to return.
The allegations levied toward the Spalt brothers included some of the same offenses Rafael pleaded guilty to, but also expanded beyond falsifying fishing quotas.