A seafood distributor based in Mississippi, as well as two managers who worked there, pleaded guilty on Tuesday for their roles in mislabeling seafood to market it as imported fish.
Federal authorities said this week that the company and the managers engaged in the scheme between 2002 and November of 2019. They were marketing the fish as imported and more expensive than some local species.
As part of the plea agreement, Quality Poultry and Seafood Inc. agreed that it will forfeit $1 million as well as pay a fine of $150,000, the Department of Justice said. The company is the largest wholesaler of seafood on the Gulf Coast of Mississippi.
In addition, James Gunkel, the company’s business manager, and Todd Rosetti, a sales manager, pleaded guilty to charges of misbranding seafood.
The case was tied to Mary Mahoney’s Old French House, a well-known restaurant in Biloxi.
The restaurant pleaded guilty back in May to wire fraud and conspiracy to misbrand seafood, with its co-owner and manager, Anthony Charles Cvitanovich, pleading guilty to the same charges.
The DOJ indictment said that QPS recommended as well as sold fish that was sourced from foreign entities to restaurants as a substitute for fish that the restaurants advertised as local on their menus.
In addition, the wholesaler mislabeled imports it then sold to some customers at a cafe and retail shop that it ran.
Todd Kim, who works as the assistant attorney general of the DOJ’s Environment and Natural Resources Division, said this week:
“QPS and company officials went to great lengths in conspiring with others to perpetuate fraud for more than a decade, even after they knew they were under federal investigation.”
A major concern of the fish mislabeling is that it can depress the value of the Gulf Coast local catch, according to Todd Gee, who serves as the U.S. attorney for southern Mississippi. As he said:
“When imported substitutes are marketed as local domestic seafood, it depresses the value of authentic Gulf Coast seafood, which means that honest local fishermen and wholesalers have a harder time making a profit. This kind of mislabeling fraud hurts the overall local seafood market and rips off restaurant customers who were paying extra to eat a premium local product.”
QPS was quite brazen in their fraud scheme, too. According to the indictment, QPS continued to import frozen fish from India, South America and Africa as a substitute for local fish for more than a year after FDA agents executed a criminal search warrant at its properties.
As part of the plea deal, Mary Mahoney’s admitted that it fraudulently sold roughly 58,750 pounds of fish from December of 2013 to November of 2019, mislabeling those products on their menu as local fish varieties.
QPS also admitted that it was the seafood supplier to Mary Mahoney’s in this case, as well as for other retailers and restaurants.
The sentencing date for Mary Mahoney’s and Cvitanovich is scheduled for November 18. Sentencing for QPS, Gunkel and Rosetti is scheduled for December 11.
