Mississippi seafood distributor fined $1.15M in mislabeling scheme

Aug. 28 (UPI) -- A Mississippi seafood distributor and two managers pleaded guilty in federal court Tuesday to mislabeling seafood and committing wire fraud in a bait-and-switch scheme.

Federal prosecutors accused Biloxi-based Quality Poultry & Seafood of importing inexpensive frozen seafood and selling it as more expensive seafood of different species that were purported to have been caught locally.

Quality Poultry & Seafood is the largest seafood wholesaler on the Mississippi Gulf Coast and agreed to pay $1 million in forfeitures and a $150,000 fine to settle the federal case against it.

Company sales manager Todd Rosetti and business manager James Gunkel also pleaded guilty to misbranding the imported seafood and enabling the fraud.

"When imported substitutes are marketed as local domestic seafood, it depresses the value of authentic Gulf Coast seafood, which means honest local fishermen and wholesalers have a harder time making a profit," said Todd Gee, U.S. Attorney for the Southern District of Mississippi.

"This kind of mislabeling fraud hurts the overall local seafood market and rips off restaurant customers who were paying extra to eat premium local product," Gee said.

Federal prosecutors said the scheme started as early as 2002 and continued nearly until the end of 2019.

Prosecutors said the company and its managers conspired to sell foreign-sourced fish from Africa, South America and India as premium local fish to restaurant customers and to individuals through its retail shop and cafe.

"When sellers purposefully substitute one fish species for another, they deceive consumers and cause potential food safety hazards to be overlooked or misidentified by processors or end users," said Justin Fielder, a special agent in charge with the Food and Drug Administration's criminal investigations unit in Miami.

The seafood wholesaler from December 2013 through November2019 supplied Biloxi-based Mary Mahoney's Old French House restaurant with more than 29 tons of frozen imported fish that the restaurant sold to its customers as higher priced and locally sourced seafood.

The restaurant knowingly sold imported fish, such as perch from Africa, triple tail from Suriname and unicorn filefish from India, as locally caught snapper and grouper, which sell for much higher prices.

Mary Mahoney's co-owner and manager Charles Cvitanovich, 55, in May pleaded guilty to felony information and misbranding seafood bought from Quality Poultry & Seafood in 2018 and 2019.

"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," Assistant Attorney General Todd Kim said.

Kim said the scheme continued for a year while the officials at QPS and Mary Mahoney's knew the federal government was investigating them.

The related cases seemingly corroborates the need for governmental inspections to confirm the sources of all boat-to-plate seafood, especially after a study recently concluded sellers mislabel about 20% of seafood sold in the United States.