Carlos Seafood Archives - Saving Seafood

NOAA’s civil action against Carlos Rafael involves scallop permits

WASHINGTON — January 10, 2018 – Today, NOAA issued a charging document to Carlos Rafael, Carlos Seafood, Inc., 28 separate business entities related to Carlos Rafael, and two of Carlos Rafael’s scallop vessel captains, alleging violations of the Magnuson-Stevens Act.

This case seeks to:

Impose $983,528 in civil monetary penalties;
Deny any future application by Carlos Rafael for any permit issued by NOAA under the Magnuson-Stevens Act;
Revoke the seafood dealer permit issued to Carlos Seafood, Inc.;
Revoke 38 commercial fishing permits; and
Revoke the operator permits issued to two of Rafael’s scallop vessel captains.

The civil action alleges 35 violations:

Counts 1-19 are based on Rafael’s conduct involved in his recent criminal case, specifically, the misreporting of species landed. For these violations, NOAA seeks to revoke the federal fisheries permits associated with the vessels at issue in the criminal case, but does not seek monetary penalties.

Counts 20-35 involve conduct unrelated to Rafael’s criminal case. Count 20 alleges that Rafael and related entities misreported where they caught yellowtail flounder in 2012. For this violation, NOAA seeks to revoke numerous permits involved and a $140,000 penalty.

Counts 21-35 involve misreporting in the scallop fishery. NOAA alleges that on four separate fishing trips in 2013, Rafael and related entities, along with two of his fishing vessel operators, filed false reports regarding the amount of scallops harvested by four vessels. For those violations, NOAA seeks to revoke permits issued to these vessels and a $843,528 penalty.

MASSACHUSETTS: Canastra Brothers Offering $93 Million for Carlos Rafael’s Fishing Fleet

October 5, 2017 — Last week in court, it was publicly revealed that the potential buyers of Carlos Rafael’s fishing fleet are brothers Richard and Ray Canastra, owners of the Whaling City Seafood Display Auction in New Bedford, Massachusetts. This morning, Richard Canastra appeared on WBSM to confirm that the brothers have entered into a memorandum of agreement with Mr. Rafael to buy his fleet for $93 million.

“We wanted to keep everything in New Bedford,” Mr. Canastra said. “Ray and I had to make a decision – do we want to do this? I’m 56 years old, Ray is 60 years old. It’s a big task…at this later stage in our life. We believe that it’s the right thing to do for New Bedford. The waterfront has been good for us since 1986, [we] started the auction in ’94, and we’d hate to see the industry collapse because of what Carlos did in the past.”

When asked about those who have raised questions about the relationship between the Canastras and Mr. Rafael, Mr. Canastra said, “I look at it this way. We are the largest fish auction in the United States, and Carlos Rafael is the largest boat owner on the East Coast.” He said that although the Canastras and Mr. Rafael are friends, the negotiations became tense, and there was a period where tensions ran so high that the brothers and Mr. Rafael did not speak for three weeks.

Mr. Canastra also discussed competition with NGOs over the permits. “Our biggest competitors here are the NGOs and people up in Maine who are in cahoots with the NGOs,” he said. He described a situation in 2015 in which Mr. Rafael purchased quota from a Maine seller at fair market value when no one else would. “There was only one offer up in Maine and that was from the NGO, and I believe it was Nature Conservancy. So do you want to see those permits go to an NGO, where it can be put on a shelf or the permit could be leased out to their favorites? That’s been happening since sectors. It was a fair deal, and everyone wants it back now.”

“There are groups up in Maine that believe that these permits should be dissolved back into the industry, or even given back to them,” Mr. Canastra added. “In reality, if they dissolve all these permits into the industry, every permit holder would receive anywhere between 200 to 300 pounds of each species, so it would not really gain anything for that permit holder but it would destroy New Bedford.”

The following is excerpted from WBSM’s exclusive article on the potential transaction:

NEW BEDFORD, Mass. — One of the owners of the Whaling City Seafood Display Auction in New Bedford is shedding more light on a proposed deal to buy [Carlos Rafael’s] fishing fleet.

Carlos Rafael has been sentenced to 46 months in prison for his illegal fishing scheme, and cannot be involved in the fishing industry during that time and three years after his release.

In an exclusive interview with WBSM’s Phil Paleologos, Richard Canastra confirms he and his brother, Ray, have entered into a memorandum of agreement with Rafael to buy his business, Carlos Seafood, Inc, for $93 million.

“We know boats. We know the business. We’re doing this to keep this in New Bedford,” said Canastra. “My plan is to get out, hopefully, in ten years when things lighten up and it can be sold properly instead of this fire sale where people want everything for nothing.”

Read and watch the full story at WBSM

MASSACHUSETTS: Carlos Rafael to leave commercial fishing behind after spending years in prison for his crimes

September 26, 2017 — U.S. District Court Judge William Young sentenced former fishing magnate Carlos “Codfather” Rafael to 46 months of imprisonment on Monday, 25 September, for his role in orchestrating a quota and tax evasion scheme out of his New Bedford, Massachusetts-based business, Carlos Seafood.

Sentencing deliberation is continuing on Tuesday, 26 September as the court considers the fate of Rafael’s 13 groundfish vessels and permits, which have been listed for forfeiture as a tentative condition of his guilty plea.

Rafael is scheduled to begin serving his prison sentence on 6 November, when he is expected to report to authorities at an assigned penal facility. His legal team has requested that Rafael serve out his prison sentence at Fort Devens, located between the Massachusetts towns of Ayer and Shirley. In addition to incarceration, Young also ordered three years of supervised release for Rafael, and mandated he pay a USD 200,000 (EUR 169,611) fine. Furthermore, Rafael has been barred by the court from having anything to do with the commercial fishing industry following his prison term and subsequent supervision period.

The deliberate, corrupt nature of Rafael’s crimes factored heavily into the sentencing terms, Young explained on Monday.

Read the full story at Seafood Source

Timeline: Case of Carlos Rafael

September 26, 2017 — Feb. 26, 2016: Federal authorities raided Carlos Seafood on South Front Street in New Bedford, arresting owner Carlos Rafael, 64, and bookkeeper Debra Messier, 60, both of Dartmouth, on charges of conspiracy and falsifying records. Rafael was held without bail; Messier was released on a $10,000 unsecured bond.

March 2, 2016: Rafael is allowed to return home under strict conditions of a $1 million bond; he is allowed to continue working, too. Rafael and his wife, Conceicao, agree to place their Tucker Lane home in North Dartmouth and Carlos Seafood as collateral for the bond.

March 25, 2016: Prosecutors receive an extension of the deadline to indict Rafael. The length of the deadline’s extension is not disclosed.

May 4, 2016: Rafael has been indicted by federal prosecutors for lying about fish catches and smuggling cash to Portugal through Logan airport in Boston, in a multi-year scheme involving hundreds of thousands of dollars, according to court documents. The indictment lists 27 counts against Rafael, for charges including conspiracy, false entries and bulk cash smuggling. Rafael is alleged to have falsely reported the species of more than 815,000 pounds of fish to the National Oceanic and Atmospheric Administration (NOAA) between 2012 and January 2016, according to the Office of U.S. Attorney Carmen Ortiz.

May 4, 2016: Antonio Freitas, 46, of Taunton is charged with using his special assignment status as a member of the Department of Homeland Security Task Force, which gave him access to restricted areas of Logan International Airport, to help Rafael smuggle cash out of the U.S. Freitas is a member of the Bristol County Sheriff’s Honor Guard.

Read the full story at the New Bedford Standard-Times

NEW BEDFORD STANDARD-TIMES: Rafael’s assets could fund observer program

June 18, 2017 — Any discussion of fishery management nowadays — official and casual alike — is likely to include musings on what should happen to the assets forfeited by Carlos Rafael as punishment for his recent crimes.

Mr. Rafael pleaded guilty to charges related to his falsifying landing records and laundering cash, and is scheduled to be sentenced in late July.

The courts are working to untangle the IRS and fisheries crimes, dealing with them at one time.

A careful distinction between tax penalties and fishing penalties must be made.

The penalties for the tax crimes will be arrived at through IRS rules and laws.

The penalties for fisheries crimes are stipulated in NOAA regulations. They provide great latitude in application, from a slap on the wrist to a permanent end of fishing for Carlos Seafood. The defense is making an argument that Mr. Rafael’s influence on the fishery is so important — due to his size — that economic harm to others would be too great if he were to be sanctioned too severely.

Infractions in the fishery will result in proceeds from fines and from 13 forfeited permits and vessels, and they should be applied toward remedies for the management system’s failures. Carlos Rafael’s criminal enterprises represent Exhibit 1 of those failures.

While his acknowledged cheating predates the current regulatory regime of sectors and quotas, certain vital aspects of the management of groundfish stocks remain inadequate, including compliance. Managers have been trying to force 100 percent monitoring on fishing trips, but the requirement that vessels cover the cost has prompted a lawsuit, ad hoc funding from the NOAA Fishery Science Center budget, and postponement of implementation. None has solved the problem, and only about 1 in 7 trips is observed. Fishermen may well be fishing differently with an observer, hewing closely to the rules when observed, only to resort to landing all they can when not. Researchers have been able to compare landings from the monitored trips against the others to make inferences about that difference, although Mr. Rafael’s schemes have confounded that effort to no small degree. Furthermore, the financial balancing act that seeks to ease the cost burden on the beleaguered industry could become a much less complicating factor if 100 percent electronic monitoring were to be implemented with those windfall funds.

Read the full opinion piece at the New Bedford Standard-Times

New indictment adds tax evasion to charges against Carlos Rafael

March 24, 2017 — The U.S. attorney included a new charge of tax evasion against Carlos Rafael as part of a “superseding” indictment released by its office last week.

The charge of tax evasion brought the total number of counts against the New Bedford fishing tycoon to 28. The others also include one count of conspiracy, 25 counts of lying to federal fishing regulators and one count of bulk cash smuggling.

According to the U.S. attorney, Rafael is expected to plead guilty to tax evasion as part of his plea agreement, which was announced earlier this month. The U.S. attorney Massachusetts provided no other information regarding the deal except that Rafael would plead guilty to evading fishing quotas and smuggling profits to Portugal in addition to tax evasion.

Rafael is scheduled in U.S. District Court in Boston on March 30 at 2:30 p.m.

The updated indictment states that from November 2014 to about October of 2015 Rafael failed to pay taxes in the sum of $108,929. It also included two new paragraphs regarding the general allegations toward Rafael.

The U.S. attorney alleges that Rafael deposited cash into accounts in Portugal to avoid paying taxes on the money. According to the indictment, Rafael told a bookkeeper for Carlos Seafood Inc. not to enter the cash payments into the company’s record-keeping system.

The U.S. attorney also alleges Rafael omitted $267,061 in reportable cash income in 2014.

Rafael spent six months in federal prison after being convicted of tax evasion in the 1980s.

Read the full story at the New Bedford Standard-Times

Prosecutors dismiss charges against bookkeeper for indicted fishing magnate Carlos Rafael

July 26, 2016 — BOSTON — Federal prosecutors moved Monday to dismiss the charges against Dartmouth resident Debra Messier, the longtime bookkeeper for indicted fishing magnate Carlos Rafael, after her case had sat largely idle since her February arrest.

The motion likely clears Messier of potential penalties — pending a judge’s ruling — ahead of Rafael’s federal trial, slated for January 2017 at U.S. District Court in Boston.

Rafael and Messier were arrested Feb. 26 on charges of conspiracy and submitting falsified records to the government, after federal authorities raided the Carlos Seafood building on New Bedford’s waterfront.

Messier was released from custody the same day on a $10,000 bond. Prosecutors said Monday’s dismissal motion was filed “in the interests of justice.”

Prosecutors allege that Rafael, for years and with Messier’s help, lied to federal authorities about the amount and kinds of fish caught by his New Bedford-based fleet, in order to evade federal fishing quotas.

Rafael, a 64-year-old North Dartmouth resident, remains released on bond totaling $2 million. Collateral includes his home; his Carlos Seafood building; and one of his fishing vessels, the Dinah Jane, along with its attached fishing permit. Prosecutors have said Rafael has citizenship both in the U.S. and his native Portugal. His bond conditions require him to wear electronic monitoring equipment and to return home by 8:30 p.m. nightly, while he continues to work on the docks.

He faces 27 counts of federal charges, including conspiracy, false entries and bulk cash smuggling. Also facing trial then is alleged smuggling accomplice Antonio M. Freitas, a 46-year-old Taunton resident and Bristol County Sheriff’s Office deputy, suspended without pay. Freitas faces two federal counts, one for bulk cash smuggling and one for international structuring.

Read the full story at the New Bedford Standard-Times

Prosecutors in Rafael case: Carlos Seafood’s transaction reports didn’t match up

May 11, 2016 — NEW BEDFORD, Mass. — The FV Hera II, a boat that prosecutors said fishing fleet owner Carlos Rafael owned through a shell corporation, reported catching 4,595 pounds of haddock on Jan. 25, then selling it to Rafael’s Carlos Seafood business, a registered dealer, according to the indictment of Rafael that was unsealed Monday.

Carlos Seafood also recorded acquiring 840 pounds of American plaice, or “dabs,” from the Hera II that day, prosecutors said.

But here’s the rub: Records of Carlos Seafood’s third-party sales Jan. 25, according to the indictment, cite about 200 pounds of haddock and 5,200 pounds of dabs.

In other words, prosecutors allege, a lot of the fish caught by the Hera II on Jan. 25 and reported as “haddock” actually were dabs, which are subject to stricter regulatory quotas. Those quotas are administered by the National Oceanic and Atmospheric Administration (NOAA) and limit how much of certain species commercial fishermen can catch.

Catching more of a protected species than allowed can bring significant value on the black market.

Read the full story at the New Bedford Standard-Times

Prosecutors get extension of deadline to indict New Bedford fishing magnate

NEW BEDFORD, Mass. (March 28, 2016) — Prosecutors have received an extension of the deadline to indict local fishing magnate Carlos Rafael, a U.S. District Court spokesperson confirmed Friday.

The length of the deadline’s extension was not disclosed.

Rafael, 63, was arrested Feb. 26 on charges of conspiracy and submitting falsified records to the government, after federal authorities raided the Carlos Seafood building on New Bedford’s waterfront.

Read the full story at the New Bedford Standard-Times

MASSACHUSETTS: Federal agents raid New Bedford seafood wholesaler

February 26, 2016 — Federal agents swarmed Carlos Seafood in New Bedford Friday morning arresting the owner Carlos Rafael and his book keeper Debra Messier.

The two are accusing of selling fish off the books. They are facing federal charges of conspiracy and submitting falsified records to the federal government to evade federal fishing quotas.

This isn’t the first time Rafael has been in trouble. In fact, over the last 20 years he’s been the subject of multiple federal investigations.

Rafael, sometimes referred to as the “Cod Father,” owns 40 fishing vessels in New Bedford and Gloucester.

“My immediate concern is what’s going to happen next week and the week after to the fisherman who have to go out to sea and the livelihood of the folks who are in his processing plant,” said New Bedford Mayor Jon Mitchell.

A court affidavit reveals that undercover IRS agents first began their investigation into Rafael in May of 2015. The agents posed as a broker and Russian immigrants involved in crime. They told Rafael they were interested in buying his business.

Read the full story at ABC News

View a PDF of the affidavit of agent Ronald Mullet in support of a criminal complaint charging Carlos Raphael