North Carolina Seafood Company Fined $500,000 for Falsely Labeled Crab Meat

Carawan, NC - A North Carolina man will go to prison for one year after selling crabmeat from South America and Asia, that was labeled “Product of USA”, according to ABC 11 News.

Claiming that the crabmeat came from local waters, Philip R. Carawan pleaded guilty for falsely labeling $4 million worth of foreign seafood.

But how often does Seafood label fraud happen? Keep reading below, the answers may shock you.

His company, called Capt. Neill’s Seafood Inc, was given five years probation and must pay a $500,000 fine.

Philip Carawan admitted to incorrectly labeling more than 179,000 pounds of Crabmeat and selling it to retailers and membership clubs.

Capt. Neill’s crabmeat was also sold at the North Carolina state fair since 2004, according to a 2016 Department of Agriculture. In 2016 the company crab dip was voted “Best New Food”.

"Seafood mislabeling is consumer fraud that undermines efforts of hardworking, honest fisherman and the free market by devaluing the price of domestic seafood," says U.S. Attorney General Norman Acker III.

"In this case, the fraudulent scheme artificially deflated the cost of domestic blue crab and gave Carawan an unacceptable economic advantage over law-abiding competitors." Norman added.

Carawan admitted that he and his company could not deliver the amount of blue crab requested, so he made up the difference by using foreign crabmeat from other countries.

He also admitted that going back to 2012, he had company workers repackage foreign crabmeat into seafood boxes labeled “Product of USA”.

"Individuals and companies who seek to profit from the fraudulent mislabeling of seafood harm American fishermen and consumers," said Assistant Attorney General Jeffrey Bossert Clark, the Justice Department's Environment and Natural Resources Division.

"We are committed to working with our law enforcement partners to hold accountable those who engage in seafood fraud and mislabeling." Jeffrey added.

 

Seafood Label Fraud Keeps Growing

To make the seafood situation worse, this is not the only company who has been caught selling falsely labeled seafood. In November of 2019 another company in New York was caught selling incorrectly labeled seafood.

 

National Geographic Says 20% Of Seafood Labels Are Wrong

National Geographic recently covered this same topic about seafood fraud in a blog post on their website. The study found that 20% of  seafood labels are wrong.

For more than three years, from 2011- 2014, over 113,000 lbs of giant squid in Peru was imported to America, and then relabeled as a more expensive squid. Totaling a value of over $1.1 million.

The Father and son duo, working for the Seafood company called “Anchor Frozen Foods Inc” admitted to conspiracy to commit wire fraud, and importing giant squid in Peru, marketing it and relabeling it as octopus. They will be fined $250,000 and will face 3-5 years in prison. The corporation will also pay a fine of $500,000 and be on probation for 5 years.

“Seafood fraud is illegal, undermines confidence in the market place, and can have serious consequences for fish, fishermen, the seafood industry and consumers,” said James Landon, Director of the National Oceanic and Atmospheric Administration’s (NOAA) Office of Law Enforcement.

Tracking Seafood With Technology

But this doesn’t deter Loch Durant, a Scotland based salmon fish farm who says they can sample any salmon and forensically identify their fish or not, weeding out the fraudsters who try to apply fake custom labels to their seafood.

This new way of testing the DNA in fish is done by a company called Oritain, A global leader in using forensic science to determine food, fiber and pharmaceutical provenance, Oritain protects the reputations of their customers by forensically tracing the actual products, not packaging or labels. Their approach proves that ‘nature gives everything specific markers that are unique to its origin’. 

Food fraud is estimated to cost the food industry about $50 Billion a year, Creating a big headache for chefs, restaurants and diners.

 Read: Singapore Researchers Urge Seafood Label Reform After Finding Pork DNA in Seafood Products.

Octopus and Squid – What is the difference?

For those who don’t know, The U.S. Food and Drug administration requires food companies selling squid to mark the species by it’s name: octopus, or as calamari.

Octopus is generally more expensive and can only be sold under the name octopus. Octopus and squid are distinct species, with a big difference in their taxonomy, habitat and physical characteristics.