The president of a Virginia seafood company pleaded guilty in federal court Wednesday to netting millions by fraudulently labeling hundreds of thousands of pounds of recalled, old or returned foreign crabmeat as fresh Chesapeake blue crab, according to court records.
The staggering bait-and-switch shocked the local food industry and highlighted the problem of mislabeled blue crab, which by some accounts is prevalent in restaurants and markets across Virginia, Maryland and The District. The case comes in an era when eating local has gained a fresh currency.
Federal prosecutors in Virginia say Casey’s Seafood, Inc. of Newport News mixed discount “distressed” crabmeat from Indonesia, Brazil and other locales with Chesapeake blue crab and labeled it as a “Product of the USA.” At times, court documents show the crabmeat Casey’s sold as Chesapeake blue crab contained only foreign meat.
Casey’s sold nearly 360,000 pounds from 2012 to 2015, but the fraud may have begun as early as 2010, according to court documents. The crab was worth $4.3 million at wholesale prices and sold in D.C., Maryland, Virginia and other states.
James R. Casey, 74, the president of Casey’s, pleaded guilty to violating the Lacey Act, a federal law on the labeling of seafood, during a hearing in Norfolk. Casey faces up to five years in prison when he is sentenced on Jan. 9. His attorney declined to comment.
“There was a significant decline in blue crab harvests, making it increasingly more expensive to purchase live blue crab, and increasingly more difficult to make a profit from the labor-intensive process of picking blue crab,” prosecutors wrote in court documents. “As a result, Casey and the company could not and did not process sufficient quantities of blue crab to meet its customers’ demands.”
The investigation was launched by a tipster, who told authorities Casey’s was adulterating its meat, according to a search warrant.
Investigators from the National Oceanic and Atmospheric Administration then purchased Casey’s crabmeat from markets in Virginia, Delaware and North Carolina and sent it out for DNA testing, which showed the meat was cut with species other than Chesapeake blue crab.
It is difficult to gauge how widespread such fraud is, but watermen, politicians and environmentalists have expressed concerns about mislabeled crab in recent years. A 2015 report by the ocean conservancy group, Oceana, found nearly 40 percent of crab cakes labeled local that it tested had imported meat.
In 2015, Sens. Mark R. Warner (D-Va.), Tim Kaine (D-Va.) and Barbara A. Mikulski (D-Md.), before her retirement, wrote to President Barack Obama urging greater regulation of crab processing to stamp out fraud.
“The fraudulent labeling of Chesapeake Bay and Atlantic Ocean blue crab meat has a detrimental impact on an industry that plays an important role in the Virginia and Maryland economies,” they wrote.
Environmentalists say crabs caught abroad are sometimes fished in unsustainable fashion. Chefs and crab lovers say the crab species sometimes mixed with Chesapeake blue crab are not as tasty as the local catch.
New federal rules aimed at cutting down seafood fraud went into effect at the start of 2018. The rules require importers to document blue crabs and other species of fish are sustainably caught abroad. But they do little to combat fraud that takes place inside the United States.
“Bad actors must be held accountable,” said Dustin Cranor, spokesperson for Oceana. “This type of mislabeling cheats consumers, disguises imported and sometimes illegally caught crab as local and harms the livelihoods of local watermen and processors that are playing by the rules. When you intentionally mislabel foreign crab meat as American, it’s fraud, plain and simple.”