U.S. District Judge Ginny Granade accepted the “binding” plea agreements for Karen L. Blyth and David H.M. Phelps, meaning she had no discretion in the sentence. Both defendants will serve substantially shorter prison terms than the punishment recommended under advisory guidelines.
Blyth, who was part owner and president of Arizona-based Consolidated Seafood Enterprises, will serve 2 years and 9 months in prison, followed by 3 years of supervised release.
Phelps, who was part owner and vice president of the company, will serve 2 years in prison, followed by 3 years of supervised release.
Each defendant also will pay a $5,000 fine, and neither can hold any ownership stake or managerial positions in the seafood industry while they are on supervised release. The judge also allowed both defendants, who live near Scottsdale, Ariz., to remain free until the Bureau of Prisons designates a prison for them.
With the judge having no sentencing leeway, the defendants and their attorneys said little in court.
“I’m sorry that this happened,” Blyth said.
Added Phelps: “I wish I’d never met my other business partners.”
His attorney, Gordon Armstrong, said that was a reference to Phelps’ partners in a seafood wholesaler near Pensacola called Reel Fish and Seafood Inc. A bitter dispute among the partners led to civil litigation in Florida and a complaint to federal law enforcement authorities
Consolidated Seafood Enterprises contracted with importers to bring in fish from abroad and then supplied the product to wholesalers that sold seafood to restaurants and stores. Blyth and Phelps also ran a seafood wholesaler near Pensacola called Reel Fish and Seafood Inc.
Blyth and Phelps admitted that they would buy and sell frozen catfish fillets called basa, swai and sutchi that they knew had been falsely labeled to avoid customs duties. They passed off the fish, as well as Lake Victoria perch from Africa, as grouper to customers in Alabama, Florida and elsewhere, according to their plea agreement.
The defendants also admitted to overstating the size of shrimp they sold and labeling them as U.S. wild caught when, in fact, they were raised on shrimp farms in foreign countries. The plea document states that both were present between January and June in 2005, when employees at Reel Fish and Seafood took shrimp out of boxes indicating they were farm-raised and repackaged them as wild-caught U.S. shrimp.
In most federal plea agreements, the prosecution agrees to recommend a certain sentence or a sentencing range, but the judge makes the final call. In this case, though, Granade either had to accept all of the terms or reject them all.
Armstrong said prosecutors likely agreed to the deal because they had witness problems. Because the case took so long to investigate, some witnesses had problems with health or memory, he said. He said he and prosecutors haggled over the length of the prison term.
“It was just a classic negotiation,” he said. “It was like buyin According to the plea agreement, the defendants:
- Falsified, or allowed employees to falsify, documents describing 283,500 pounds of Vietnamese catfish as sole. Some of the fish had tested positive for malachite green, a chemical compound prohibited in the United States, and a banned antibiotic called Enrofloxin, although Armstrong said they were FDA-approved concentrations.
- Avoided an anti-dumping duty of $40,098 on 81,000 pounds imported Vietnamese fish by labeling it as sole.
- Sold 101,078 pounds of catfish as grouper to 65 customers of Reel Fish and Seafood in Alabama, Florida and elsewhere.
- Sold 25,000 pounds of imported Lake Victoria perch as grouper or snapper to 45 customers of Reel Fish from Jan. 20, 2005, to May 8, 2006.
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