Long Island Fisherman and Fish Dealer Plead Guilty to Wire Fraud and Records Falsification
The operator of the dragger F/V Norseman and an associated fish dealer pleaded guilty Thursday in federal court in Central Islip, N.Y., to federal violations stemming from their role in systematically underreporting fluke (summer flounder) that was being harvested as part of the federal Research Set-Aside Program, the Justice Department’s Environment and Natural Resources Division announced.
Charles Wertz Jr., a commercial fisherman from East Meadow, N.Y., pleaded guilty to one count of wire fraud and two counts of falsification of federal records for knowingly submitting 137 falsified dealer reports from May 2009 through December 2011, and 70 falsified fishing logs, known as fishing vessel trip reports (FVTRs), from May 2011 through December 2011, as part of a scheme to defraud the United States of overharvested and underreported fluke. The fish dealer, C&C Ocean Fishery Ltd., pleaded guilty to one count of wire fraud and three counts of falsification of federal records for its participation in the scheme, which included aiding and abetting the submission of falsified dealer reports and FVTRs.
As part of the plea deal, the defendants agreed to pay between $480,000 and $516,000 in combined fines and forfeitures. The defendants also agreed to multiple sentence conditions, including relinquishment of federal fishing permits, a ban on participation in the Research Seat-Aside Program, divestiture of any interest in the F/V Norseman, and shutting down the company, C&C Ocean Fishery Ltd. The court will hear sentencing recommendations at a hearing set for Nov. 22, 2013.
“Protecting the integrity of the Research Set Aside program supports the goal of ensuring sustainable fisheries for future generations,” said Robert G. Dreher, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. “When individuals like the defendant willfully defraud the government in order to turn a larger profit for themselves they are also cheating their fellow fishermen who choose to play by the rules. Today’s plea demonstrates that we will hold those who break the rules accountable and make sure that this valuable resource remains available to everyone.”
“Our office takes these violations very seriously,” said Logan Gregory, Special Agent in Charge of the National Oceanic and Atmospheric Administration (NOAA) Office of Law Enforcement's Northeast Division. “This type of illegal activity has a ripple effect on seafood markets and impacts fishing communities by driving down the price of fluke which reduces the potential profits of fishermen and dealers who abide by the regulations. We hope the outcome of this case deters others from coming up with similar schemes to circumvent federal fisheries laws and regulations and from gaining an unfair advantage over those who comply with the regulations.”
Under NOAA regulations, all of the Norseman’s catch had to be reported to NOAA on FVTRs. During the years 2009, 2010, and 2011, the Norseman principally targeted fluke. However, on multiple occasions the vessel exceeded its relevant federal and New York State quotas for fluke for 137 trips, totaling 86,080 pounds of fluke worth approximately $200,000.
In order to cover up the illegal fluke harvesting, the operators of the Norseman falsified the FVTRs that were submitted to NOAA. For each of the 137 trips, a false FVTR was submitted. During 2009 and 2010, another individual submitted the false FVTRs, but by May 2, 2011, Mr. Wertz was falsifying and submitting the FVTRs himself. The defendants were aware that the FVTRs were utilized by NOAA as part of the administration of its statutory-mandated fisheries management program.
C&C Ocean was not only aware of the false Norseman FVTRs, but it aided and abetted the perpetration of the FVTR scheme through its preparation of federal dealer reports. As a federal dealer, C&C Ocean was required to prepare and submit federal dealer reports to NOAA. The dealer reports include information such as date of landing, port of landing, catch vessel, corresponding FVTR numbers, commercial grade, species, price, and weight. In order to cover up the overharvesting that occurred on the water, C&C Ocean’s dealer report had to match the catch data that was submitted on the corresponding FVTR. In other words, if the FVTR falsely underreported the Norseman’s catch of fluke, then the scheme would likely be detected unless the corresponding dealer report was similarly falsified. Both defendants prepared and submitted false dealer reports for each of the trips set forth in the table.
The defendants electronically submitted the 137 false dealer reports from Wertz’s desktop computer in New York, through an out-of-state internet server, to NOAA’s Regional Fisheries Administrator in Gloucester, Mass.
The case was investigated by agents of NOAA’s National Marine Fisheries Service, with assistance from the New York State Department of Environmental Conservation Police. The case is being prosecuted by Christopher L. Hale of the Justice Department’s Environmental Crimes Section, Environment and Natural Resources Division.