The Government Vs Carlos Rafael
On Monday, August 19, 2019 NOAA fisheries finally announced the settlement agreement between Carlos "The Codfather" Rafael and the federal government. This settlement has been a long time in the making. In Febuary of 2016, federal agents arrested Rafael in a raid on his seafood business in New Bedford. In May 2016 he was indicted on 27 counts, including conspiracy, falsifying federal records and cash smuggling. Rafael eventually plead guilty in March 2017 and is currently serving his jail sentence.
The big question, "What would happen to the rest of his fleet though the civil case?" has been partially answered through this settlement. Carlos is being forced to sell his fishing business and pay fines. He can never be in the fishing industry again and the captains who helped him are suspended and under parole for several years.
What comes next? For the rest of the fleet, the focus is on the fishing permits, the rights to go fishing, and who is going to be able to buy those assets. Word on the docks is that Blue Harvest, A New York-based private equity firm which recently purchased Atlantic Trawlers Fishing (five of the largest fishing vessels operating in Maine) is looking to make a deal.
These permits represent an opportunity. Hopefully NOAA fisheries will treat it as such and utilize their oversight and approval of any deals to ensure that communities throughout New England can continue to have access to the groundfish fishery.
One quick note: Rafael is being fined $3 million. He is asking for over $100 million for his permits (groundfish, scallop, squid, monkfish, etc) and boats.
Statement from Chris Oliver, Assistant Administrator, NOAA Fisheries on the Settlement of the Government’s Civil Case against Carlos Rafael and his Fishing Captains
U.S. fisheries are among the most sustainable in the world. That achievement is based on dynamic management and by honest fishermen following the rules. Today’s settlement of the government’s civil case against Carlos Rafael accomplishes NOAA’s chief objective of permanently removing Mr. Rafael from participation in federal fisheries. The settlement also clears the way for Mr. Rafael’s fishing assets that have been tied up in this litigation to be returned to productive use. Mr. Rafael’s forced divestiture and permanent ban from commercial fishing is a fitting end to this case, on top of the criminal sentence he is already serving. This settlement also holds accountable the vessel captains who now face suspensions, probationary periods, additional monitoring and reporting requirements, and the threat of a lifetime ban from the industry if they intentionally violate federal fisheries regulations again. It also serves as a reminder that no one is exempt from the rules.
Rafael Seafoods Settlement Summary
On August 19, 2019, NOAA settled its pending civil administrative claims against Carlos Rafael and his fishing captains. Under the terms of the settlement, Rafael is required to:
Pay a $3,010,633 civil monetary penalty;
Relinquish the seafood dealer permit issued to Carlos Seafood, by September 1, 2019;
Permanently cease all commercial fishing, except for scalloping, by December 31, 2019; scalloping must cease by March 31, 2020; and
Sell all limited access federal fishing permits and fishing vessels he owns or controls, by December 31, 2020, through transactions reviewed and approved by NOAA.
17 of Rafael’s former fishing vessel captains are required to:
Serve suspensions of their operator permits during which they cannot be aboard a federally permitted vessel while it is at sea or offloading. The periods of suspension range between 20 and 200 days and are based on the number and severity of each captain’s violations;
Serve probationary periods ranging between 1 and 3 years (likewise, based on the number and severity of their violations). During their probationary periods, the captains also agree to be subject to additional monitoring and reporting requirements; and
Permanently relinquish their operator permit and be banned from commercial fishing if they are found liable for an intentional or reckless violation during their period of probation.
Rafael’s $3 million penalty, forced divestiture, and permanent ban on commercial fishing provided for in this settlement come on top of his criminal sentence for conduct that also was at issue in this case. For his criminal violations, Rafael was sentenced to 46 months of incarceration, approximately $300,000 in fines and restitution, and three years of supervised release, during which he is barred from the fishing industry. He also forfeited two fishing vessels in connection with his criminal case.
Pursuant to the forced divestiture, Rafael is required to sell his fishing vessels and permits and will be allowed to retain the proceeds. The great majority of Rafael’s civil and criminal violations involved the groundfish fishery; Rafael’s highly valued scallop permits were not used in those violations.