James R. Casey of Poquoson, Virginia, pleaded guilty today
in federal court in Newport News, Virginia, on charges that he led a lucrative
conspiracy to falsely label millions of dollars worth of foreign crab meat as
“Product of USA,” announced Acting Assistant Attorney General Jeffrey H. Wood
of the Justice Department’s Environment and Natural Resources Division and G.
Zachary Terwilliger, the United States Attorney for the Eastern District of
Virginia.
“Blue crabs are a classic American seafood product and a
vital resource for coastal communities in Virginia, Maryland, North Carolina,
and other parts of the United States,” said Acting Assistant Attorney General
Jeffrey H. Wood. “As a nation, we invest tremendously in the management of
Atlantic blue crab populations and other marine resources, and those efforts –
along with the jobs of American seafood workers – are placed at risk by frauds
like the one exposed in this case. The Department of Justice, under the
leadership of Attorney General Jeff Sessions, will continue to take action to
enforce the law and to protect the economic competiveness of American products
and the safety of American consumers.”
“Mr. Casey conspired to replace Atlantic Blue Crab with crab
meat from Indonesia, China, Thailand, Vietnam, and Central and South America,”
said U.S Attorney G. Zachary Terwilliger for the Eastern District of Virginia.
“Casey falsely labeled nearly 400,000 pounds of crab meat with a retail value
in the millions of dollars. This fraud causes real financial harm to economies
here in the region, and threatens to tarnish the good name of the waterman who
have worked these waters for generations. We are committed to working with our
federal and state partners to ensure compliance with the Lacey Act, and to
enforce our nation’s environmental laws that are in place to protect consumers
from similar fraud schemes.”
"Seafood fraud undermines the economic viability of
U.S. and global fisheries, deceives consumers, and threatens the health of
those who consume tainted or misidentified seafood products," said James
Landon, Director of NOAA's Office of Law Enforcement. "This case
underscores the efforts taken by federal law enforcement to strengthen seafood
fraud detection throughout the supply chain, and our continued commitment to
diligently work to safeguard the industry and consumers."
Casey was the owner and President of Casey’s Seafood Inc., a
wholesale processor of crab meat and other seafood. He pleaded guilty to
conspiring with others to substitute foreign crab meat for Atlantic blue crab
and, as part of the plea, admitted to falsely labeling more than 183 tons of
crab meat, which was then sold to grocery stores and independent retailers.
A significant decline in Atlantic blue crab (Callinectes
sapidus) harvests that began in 2010 made it increasingly expensive to purchase
live Atlantic blue crab and increasingly difficult to profit from the
labor-intensive process of picking meat from live-harvested blue crab. As part
of his guilty plea, Casey admitted that, because of this decline, he and his
company could not and did not process sufficient quantities of Atlantic blue
crab to meet customer demands. To make up the shortfall, the co-conspirators
used foreign crab meat to fulfill customer orders. During the periods when the
company did not process blue crab—which sometimes lasted three months—the
co-conspirators purchased crab meat (not live crabs) from Indonesia, China,
Thailand, Vietnam, and other foreign locales.
The crab meat from Indonesia, China, Thailand, and Vietnam
included meat from Portunus pelagicus, Portunus haanii, and Ovalipes punctatus,
which are all Indo-West Pacific species of crab that do not live in the
continental waters of the United States. The company also purchased crab meat
(not live crabs) from Central American sources, which did include Atlantic blue
crab, Callinectes sapidus, but also included other species such as Callinectes
bocourti, Callinectes bellicosis, Callinectes toxotes, and Callinectes
arcuatus.
As part of the guilty plea, Casey further admitted that
beginning at least as early as 2010, and continuing through June 17, 2015, he
directed company employees to unpack foreign crab meat from his suppliers’
containers, comingle it with domestic blue crab and/or other types of crab, and
re-pack that crab meat into Casey’s Seafood containers, all of which were
labeled “Product of USA.”
As part of the plea, Casey admitted that part of the
conspiracy was to purchase discounted foreign crab meat, some of which was
referred to as “distressed” because it was approaching or beyond its posted
“best used by” dates. Casey admitted to directing company employees to
“re-condition” the “distressed” crab meat by re-pasteurizing it, and then
packaging the “re-conditioned” meat into the company’s containers, which were
labeled and sold as blue crab and “Product of USA.” Casey also directed
employees to place labels with “Product of USA” on containers that concealed
labels marked as “Product of China” and “Product of Brazil.”
This case was part of an ongoing effort by the Department of
Commerce’s National Oceanic and Atmospheric Administration Office of Law
Enforcement, in coordination with the Food and Drug Administration, Department
of Homeland Security, The Virginia Marine Police, and the Department of Justice
to detect, deter, and prosecute those engaged in the false labeling of crab
meat.
The guilty plea took place before U.S. District Court Judge
Raymond A. Jackson in Newport News. Sentencing will take place on January 9,
2019. The maximum sentence for conspiracy to falsely label crab meat is five
years in prison and a fine of up to half the gross gain of the offense.
The investigation is continuing. This prosecution is being
handled by the Justice Department’s Environmental Crimes Section and the U.S.
Attorney’s Office for the Eastern District of Virginia. The government is
represented by Assistant United States Attorney Eric Hurt and Trial Attorney
Gary N. Donner.
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