Hefty Penalties for 86,000 lbs of Illegal Fluke
An investigation initiated in July 2010 by NOAA’s Office of Law Enforcement (OLE) into Research Set-Aside (RSA) program violations culminated in a guilty plea on August 15, 2013, by an East Meadow, New York, fisherman and his fish dealer company to wire fraud and falsifying federal records.
Charles Wertz, Jr. pled guilty in federal district court to one count of wire fraud and two counts of falsifying federal records. His company, C&C Ocean Fishery, Ltd., pled guilty to one count of wire fraud and three counts of falsifying federal records. Though the final sentence is up to the Court, the defendants have agreed to pay between $480,000 and $516,000 in combined fines and forfeitures and will undergo multiple sentence conditions, including relinquishment of federal fishing permits, a ban on participation in the RSA program, and shutting down C&C Ocean Fishery. At a sentencing hearing set for November 22, 2013, the Court will decide what other penalties, if any, will be imposed.
In all, OLE agents determined that Wertz filed 137 false federal dealer reports and 70 false fishing logs while C&C Ocean Fishery aided and abetted in the submission of the reports. These violations led to criminal charges although there were also violations of the Magnuson-Stevens Fishery Conservation and Management Act.
“It’s our job to uphold the law and protect the interests of the fishing community,” said Special Agent Todd Smith. “In this instance, the offending party committed more than 200 violations under the Magnuson Stevens Act. We’re extremely happy with the guilty plea. These are fish that the honest recreational and commercial stakeholders never had a chance to catch.”
The RSA program was established as a mechanism to fund research and compensate vessel owners through the sale of fish harvested under a research quota or research days at sea. While using set-aside days or quota, vessels may be exempted from trip limits, some seasonal closures, or other restrictions that otherwise apply to the general fleet.
“The RSA program was designed as a vehicle to promote scientific research and benefit the fishing community at the same time,” said Sam Rauch, Acting Assistant Administrator of NOAA Fisheries. “The underreporting of more than 86,000 pounds of fluke is a problem and impacts NOAA’s ability to accurately determine quota and assess the stock. This ultimately affects the entire industry.”
Wertz manipulated the system by purchasing set-asides for fluke (also known as summer flounder) but underreporting the total catch. He used C&C Ocean Fishery to file false federal dealer reports that matched what was filed from his fishing vessel. The information submitted to NOAA on catch weights and fish species was false.
A clever ruse but OLE special agents were on the case. A critical element of the investigation was nighttime surveillance, which was conducted in public view over the course of several nights providing solid evidence of the illegal activity (see slideshow). Agents worked with the Department of Justice Environmental Crimes Section to obtain and execute search warrants leading to the documentation of more than 86,000 pounds of unreported catch worth nearly $200,000. A quick look at the data shows an increase in the price of fluke month-over-month following the execution of the search warrants on March 26, 2012.
Special Agent Matt Gilmore noted how the honest fisherman would benefit from this bust. “This is economics 101. By exposing the influx of illegal catch, there was less supply in the marketplace. As a result, law-abiding fishermen were able to fetch nearly 60 percent more per pound for their catch. Fish equals money, and where there is money there is greed,” said Gilmore.
Although this case has concluded, it is part of a larger investigation into alleged abuse of the RSA Program. Expect more on this issue throughout the year.
This story was developed by John Thibodeau, Communications Specialist for NOAA’s Office of Law Enforcement. To contact him, please call 301-427-8234 or email John.Thibodeau@noaa.gov.