After owner pleads, Columbia seafood company admits to selling falsely-labeled crab meat

Blue crabs have historically been North Carolina’s most valuable commercial fishery. [photo courtesy Hyde County/Megan Shaw]

One month after the company’s owner entered a guilty plea to similar charges, a Tyrrell County seafood processor admitted to selling millions of dollars of imported crab meat that was labeled as coming from local blue crab.

Capt. Neill’s Seafood, Inc. of Columbia entered the guilty plea Wednesday in federal court in New Bern.

According to federal prosecutors, Phillip R. Carawan, owner, president and CEO of Capt. Neill’s, told workers to label more than 179,872 pounds of crab meat with a retail market value of $4,082,841.

Between 2012 and June 2015, the company imported crab meat from South America and Asia, and then relabeled it as being from jumbo blue crabs caught locally.

The crab meat was then sold to wholesale clubs such as Costco and Sam’s Club and other retailers.

Carawan admitted in August as part of plea agreement that the company could not keep up with demand, leading them to repackaging foreign crabmeat as a “Product of USA”.

“Seafood mislabeling is consumer fraud that undermines efforts of hardworking, honest fisherman and the free market by devaluing the price of domestic seafood,” said Acting United States Attorney G. Norman Acker III. “In this case, the fraudulent scheme artificially deflated the cost of domestic blue crab and gave Capt. Neill’s Seafood an unacceptable economic advantage over law-abiding competitors.”

“Seafood fraud and mislabeling can affect the economic value of our domestic fisheries,” said Logan Gregory, Deputy Director of the U.S. Department of Commerce’s National Oceanic and Atmospheric Administration Office (NOAA) of Law Enforcement. “Our office is committed to investigating these crimes to help ensure the economic value and sustainability of our fisheries.”

As part of its plea agreement, Capt. Neill’s Seafood agreed to a criminal fine of $500,000; to pay restitution to recipients of the mislabeled crabmeat; to develop and implement a compliance program; and to be debarred from any federal contracts during the term of probation.

Prosecutors will request that the company be placed on probation for a term of five years, the maximum sentence authorized for a corporate defendant for the charge.

In order to ensure payment of all monetary penalties, Capt. Neill’s Seafood’s sister corporation, Capt. Charlie’s Seafood, agreed to serve as a guarantor.

As part of the plea agreements entered into by Carawan and Capt. Neill’s, restitution will be made to persons whom the government confirmed purchased Capt. Neill’s jumbo crab meat between 2012 and June 16, 2015.

For individuals who wish to see whether they qualify for restitution and for further information on the prosecution, visit:
https://www.justice.gov/usao-ednc/captneillsseafoodvictiminformationpage

Both Carawan and the company will be sentenced in January.

The maximum sentence for falsely labeling crab meat by a corporation is five years’ probation and a fine of up to twice the gross gain of the offense, which in this case, is $8,165,682.00.

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Columbia seafood company head admits to labeling imported crab meat as local

About Sam Walker 264 Articles
Sam Walker is news director for OBXToday.com, Beach 104, 99.1 The Sound, 94.5 WCMS and Classic Rock 92.3. Reach him at sam@obxtoday.com

1 Comment

  1. What about compensating US crabbing businesses for revenue lost to the influx of imported product deliberately mislabeled as “local”?

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