Crime

NC seafood distributor fined $100,000 for mislabeling shrimp

Federal prosecutors say a Dunn-based seafood processor and distributor used a bit of bait-and-switch when falsely labeling almost 25,000 pounds of farm-raised imported shrimp headed for Louisiana.

But Wade Smith, the Raleigh lawyer representing Alphin Brothers, the company at the center of the accusations, says the mislabeling was the result of a rogue employee acting without authority of any higher-ups.

As part of a plea arrangement that brought an end to a six-year federal investigation, Alphin Brothers, a company that has been in the food industry since 1947, agreed to pay a criminal fine of $100,000 and forfeit 21,450 pounds of shrimp.

The company pleaded guilty in February to one count of making or submitting false records in violation of the Lacey Act.

According to the court documents, an Alphin Brothers employee directed other employees to falsely label the 25,000 pounds of imported shrimp as a wild-caught product of the United States.

In addition to the fine and forfeiture of shrimp, the company also will be on three years of probation, according to the sentence entered on Tuesday in federal court.

The company will be required to implement a training program for its employees, educating them on federal labeling requirements.

Federal regulations require seafood retailers to provide customers with notice of the country of origin of shrimp or other shellfish and whether it was wild-caught or farm-raised.

The regulations, known by the acronym COOL, for “country of origin labeling,” allow companies to provide the information in most any format as long as it is in a conspicuous location where a customer is likely to read it.

Many shrimp processors and wholesale distributors, including Alphin, have the information on packaging intended for retail sale.

Under the COOL regulations, shrimp may only be labeled as “product of the United States” if the shellfish were harvested and processed in the United States or by a U.S.-flagged vessel if it has not undergone substantial transformation outside the country.

The investigation began in Louisiana with the National Oceanic and Atmospheric Administration Administration Office of Law Enforcement taking the lead. The Louisiana Department of Wildlife and Fisheries assisted.

After learning that Alphin employees were being interviewed, Smith said, the company invited investigators to the N.C. headquarters and provided access to its employees and copies of records. Alphin Brothers also invited the assistant U.S. attorney running the investigation to come to Dunn to tour the company’s facility.

“It cooperated in every way,” Smith said in defense of Alphin.

No violations of law were found in Louisiana, Smith said, and the government dropped its case there.

“Some substantial period of time passed and the government came to North Carolina to pursue the actions of a single rogue employee who, without the company’s permission, and in a very few instances, mislabeled shrimp, placing foreign shrimp in containers which implied the shrimp came from local waters,” Smith added in a statement released on Tuesday.

The employee acted without the company’s knowledge, he said, but corporate criminal law holds the company responsible whether it authorized the conduct or not.

No individual from Alphin Brothers has been charged or will be charged, Smith said.

“While the company regrets that it had to endure a six-year investigation, it is proud that it cooperated in every respect and that the only violation this lengthy investigation was able to uncover was a rogue act by a single employee who had no authority to do what he did,” Smith said.

  Comments