California Seafood Corporation Sentenced to Pay $1 Million for False Labeling of Seafood Products

WASHINGTON – Seafood Solutions Inc., a California corporation, was sentenced in federal court in Los Angeles today to pay $1 million in fines and community service payments for its role in the false labeling of frozen fish fillets. The corporation was fined $700,000 and ordered to make a community service donation of $300,000 to the National Fish and Wildlife Foundation. The money is to be used to fund projects related to methodologies, databases and other research into the identification of marine organisms. In addition, the company was sentenced to three years of probation, was ordered to forfeit all remaining inventory of the falsely labeled fish and to develop and implement a corporate compliance plan.

The sentence stemmed from the conviction of Seafood Solutions on July 25, 2011, on a single count of trafficking in fish knowing that the fish had been transported and sold in violation of the U.S. Lacey Act. Specifically, the fish was Pangasius hypophthalmus, a species in the catfish family that were misleadingly labeled as “Paradise Grouper” and “Falcon Baie Grouper.” Seafood Solutions was one of three defendants named in the same charging document. Co-defendants Chau-Shing (Duke) Lin, and Christopher Ragone also entered guilty pleas on July 25, 2011, according to plea agreements.

Duke Lin, 64, of Rancho Palos Verdes, Calif., pleaded guilty to one count of trafficking in fish when in the exercise of due care he should have known that the fish had been transported and sold in violation of the Lacey Act. Duke Lin also pleaded guilty to one count of misbranding food. Christopher Ragone, 50, of Santa Ana, Calif., pleaded guilty to two counts of misbranding food. The sentencing hearing for the individuals is set for Feb. 13, 2012.

According to the plea agreements, in approximately June 2004, Seafood Solutions began to sell a fish it declared to customs as “ponga.” The fish being imported as ponga was Pangasius hypophthalmus, a species in the catfish family. The fish was then sold under the brand names, and in boxes labeled in part as, “Paradise Grouper” and “Falcon Baie Grouper.”

Between July 2005 and February 2006, a wholesale distributor that had purchased this product returned approximately $411,194 worth of the product labeled as “Paradise Grouper” and “ponga” or “Falcon Baie Grouper” and “ponga” because the wholesale distributor’s customer mistakenly believed that the fish product was grouper. Seafood Solutions agreed to be invoiced for and received the returned product, knowing that it had been inaccurately labeled. Defendants Lin, Ragone and Seafood Solutions knowingly again sold and transported the fish in interstate commerce even after its return from the customer, knowing that it was misleadingly labeled. From February 2006 to April 2006, Defendant Ragone sold approximately $2 million worth of Pangasius fillets knowing that the product bore the “Paradise Grouper” and “ponga” labels and was thus misleadingly labeled.

The case was investigated by the National Oceanic and Atmospheric Administration, Office of Law Enforcement and the Department of Homeland Security, Immigration and Customs Enforcement. The case is being prosecuted by the Environmental Crimes Section of the Department of Justice and the U.S. Attorney’s Office for the Central District of California.