Sunday, April 11, 2021

Columbia seafood company CEO jailed for selling falsely labelled crab meat

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Five months after pleading guilty to federal charges that his company falsely labeled millions of dollars’ worth of foreign crab meat as being caught in North Carolina waters, a seafood entrepreneur has been sentenced to a year and one day in prison.

Phillip Carawan, the owner, president and CEO of Columbia, North Carolina-based Capt. Neill’s Seafood Inc., must also pay a $250,000 fine. He was sentenced Thursday in the U.S. District Court for the Eastern District of North Carolina.

A criminal information filing from last June describes how the company, purportedly at the behest of Carawan, falsely labeled its crab as a “Product of USA,” when, in fact, some of the “blue crab” actually came from South American an Asia.

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From there, the crab was sold on big box store shelves, such as Costco and Sam’s Club.

As part of their investigation, the feds tested crab meat being advertised as being caught from “North Carolina waters.” The tests revealed that some of it was actually foreign meat – and in some cases, not actually blue crab, despite being labeled as such on shelves.

According to the criminal information filing, when Capt. Neill’s was unable to satisfy blue crab demand locally, Carawan instructed employees “to repackage and falsely label approximately 200,536 pounds of imported crab meat as a product of the United States.”

Four deals outlined in the filing between 2012 and 2015 involved crab worth nearly $4.1 million. That’s as, in the plea agreement, Carawan admitted to falsely labeling 180,000 pounds of crab meat, valued at $4 million.

And Carawan could have actually faced more jail time. For his charges, he could have faced up to five years in prison and a fine of up to twice the gross gain of the offense – in this case nearly $8.2 million.  

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