October 28, 2013 — The current owners of U.S.-based Mar-Lees Seafood are suing the company's founder and former owner, John Lees Jr., alleging Lees used his position with his former company to set up a racketeering and kickback scheme.
The owning company, Delaware-based Seafood Development, published detailed accounts of its allegations in a civil suit in U.S. District Court in Massachusetts on 25 October. In it, the suit named Lees, Mar-Lees Rhode-Island based attorney, Michael Sweeney, Massachusetts-based seafood company NorAtlantic 21 and New Jersey-based Blue Sea Products as co-conspirators.
Lees originally sold 80 percent of Mar-Lees to Harbinger Seafoods, which later became Seafood Development, in September of 2010. At issue in the lawsuit are what the suit called Lees' violations of the terms of that sale agreement. According to the suit, the agreement allowed Lees to retain 20 percent interest in the company through ML Holdings, Lees' holding company, and to stay on as the Mar-Lees' president and CEO.
As a condition of his employment, Lees had to agree to not conduct deals with competitors, or act in any other way contrary to Mar-Lees' best interests. This agreement was described in the court documents as "goodwill." The total sale to Harbinger amounted to USD 22 million, and, according to the suit, more than half of that money was paying for that goodwill.
"Lees and ML Holdings conducted and participated in the conduct of the affairs of the Mar-Lees Enterprise through a pattern of racketeering activity involving numerous acts of commercial bribery in violation of state law and federal wire and mail fraud in connection with multiple fraudulent schemes," the suit stated.
Read the full story at Seafood Source