The largest seafood wholesaler on the Mississippi Gulf Coast has pleaded guilty to mislabeling and selling frozen imported seafood for more than a decade.
Seafood Mislabeling and Fraud
A major Mississippi seafood distributor and two company managers have pleaded guilty in federal court to conspiring to mislabel seafood and committing wire fraud.
Quality Poultry and Seafood Inc
Unsealed court documents show that Quality Poultry and Seafood Inc. a Biloxi-based wholesale seafood giant operating on the Mississippi Gulf Coast, conspired with other businesses to sell misbranded seafood.
Restaurant and Wholesaler Collusion
From as early as 2002 and as late as 2019, Quality sold foreign, frozen fish and seafood to Mary Mahoney’s Old French House, a well-known seafood restaurant in Biloxi.
Selling Foreign Frozen Fish as Fresh and Local
During that period, the wholesaler and two of its managers conspired with Mahoney’s to brand its fish as fresh Gulf seafood and sell it at a higher price to local customers.
60,000 Pounds in 6 Years
In particular, between December 2013 and November 2019, it sold 58,750 pounds of Lake Victoria Perch (LVP), Trigger Fish, Triple Tail, and Unicorn Filefish – all of which were imported into the US – as Gulf seafood at a premium price.
A Purposeful Process
The company was accused of purposefully using “inexpensive fish that, by taste and appearance, could be substituted for the premium local species advertised with little likelihood of detection.”
Company and Managers Plead Guilty
The company issued a guilty plea on Tuesday and agreed to forfeit $1 million in company funds and pay a separate fine of $150,000. Both managers involved in the case, Todd A. Rosetti and James W. Gunkel also pleaded guilty to misbranding.
Manager Consequences
The managers must now pay $1000 fines of their own and could face up to one year in prison as a maximum penalty.
Directly Participating in the Crime
According to court documents, Rosetti directly participated in setting misleading prices for the seafood, and Gunkel monitored all prices that were established for both wholesale and retail customers.
Misleading and Defrauding Customers
Not only did these actions mislead and defraud thousands of customers who trusted the brand and the restaurant, but it had a direct run-on effect on other local businesses and their livelihoods.
Affecting Local Fishermen and Wholesalers
“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,” U.S. Attorney Todd W. Gee said in a statement on the case.
Locally Famous Restaurant
This is the latest development in a case involving Mahony’s, a beloved and locally famous Biloxi restaurant that has operated for more than 50 years and always branded itself as selling 100% local produce.
Restaurant Pleads Guilty
Earlier this year Mahony’s pleaded guilty to the same felony charges – misbranding seafood and wire fraud, a plea that included Anthony Charles Cvitanovich, the restaurant’s co-owner and manager.
Actions Taken for Profit and Marketability
The restaurant directly benefited from Quality’s action because its menu items “would not have been as marketable or profitable if its actual species and origin had been truthfully identified.”
Purposeful Misrepresentation
“It was the purpose of the conspirators and the objective of their conspiracy to benefit financially by misrepresenting and by facilitating the misrepresentation of the fish they and others sold as locally sourced premium fish,” the court documents read.
Willfully and Knowingly
“The conspirators well knew they were not the local popular species advertised and identified on menus for which customers were charged,” it continued.
$1.35 Million Forfeit
Mahoneys has agreed to forfeit up to $1.35 million according to federal records, which was calculated to be the amount it gained through decades of misbranding.
Sentencing Dates
Sentencing for Mahoneys and Cvitanovich is set for Nov. 18, and sentencing for QPS, Rosetti, and Gunkel should take place on Dec 11.
Class Action Lawsuits
The restaurant’s woes are likely far from over. Earlier this month a class-action lawsuit was filed against Mahoneys and Cvitanovich in the U.S. District Court, on behalf of an Alabama resident who ate at the restaurant three times between 2013 and 2018.
Compensation for Customers
The lawsuit is seeking financial damages for “all persons residing in the United States who purchased foreign fish at Mary Mahoney’s between January 1, 2012, and November 30, 2019.”
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