May 19, 2009: President of Company That Illegally Imported Catfish Sentenced to More Than Five Years in Federal Prison
Food and Drug Administration
Office of Criminal Investigations
U.S. Department of Justice Press Release
For Immediate Release
May 19, 2009
United States Attorney
Public Affairs Office
WASHINGTON - A Virginia man has been sentenced to 63 months in federal prison for participating in a conspiracy that led to more than 10 million pounds of frozen catfish being imported from Vietnam, but fraudulently labeled and sold in the United States as sole, grouper and other species, the Justice Department announced. This sentence is one of the longest imposed by a federal judge for falsely labeling seafood.
Peter Xuong Lam of Fairfax, Va., who was the president of Virginia Star Seafood Corp., was sentenced late yesterday afternoon by U.S. District Judge Philip S. Gutierrez for the Central District of California. In addition to the prison term, Judge Gutierrez ordered Lam to forfeit more than $12 million to the government for anti-dumping duties avoided.
A second man involved in the scheme, Arthur Yavelberg of Reston, Va., who was the president of Silver Seas, a Virginia-based fish importer, was also sentenced yesterday for his role in the conspiracy to import mislabeled fish to avoid federal tariffs. Judge Gutierrez sentenced Yavelberg to a one year period of probation.
The cases against Lam and Yavelberg are part of an ongoing prosecution of importers and seafood dealers who worked together to import catfish from Vietnam and sell frozen fillets that were falsely labeled as more desirable and more expensive fish.
Following a three-week trial, Lam was convicted last October of conspiring to import mislabeled fish in order to avoid federal import tariffs and three counts of dealing in fish that he knew had been imported contrary to law. At the same trial, Yavelberg was convicted of a misdemeanor conspiracy count.
Virginia Star and International Sea Products imported $15.5 million worth of catfish that was illegally labeled and imported as sole, grouper, flounder, snakehead, channa and conger pike (a type of eel). DNA tests revealed that the frozen fish was in fact Pangasius hypophthalmus, a fish in the catfish family marketed under approved trade names including swai or striped pangasius. An anti-dumping duty was placed on Pangasius hypophthalmus imports from Vietnam in January 2003 after a petition was filed by domestic catfish farmers, who alleged that this fish was being imported from Vietnam at less than fair market value. None of the species names used to label the imported fish are subject to any federal tariffs.
To date, a dozen individuals and companies have been convicted of criminal charges related to the scheme to avoid paying tariffs by falsely labeling fish for import and then selling it in the United States at below-market price. The organizer of the smuggling conspiracy, Henry Nguyen, remains a fugitive and is believed to be residing in Vietnam.
Major sentences for those involved include:
- David Wong: one year and a day in prison followed by one year of supervised release and a fine of $25,000.
- Tai Wai David Chu: two years probation to include six months of home detention and a fine of $3,000.
- Henry C.D. Yip: one year probation and a fine of $40,000.
- Dakon International: two years probation with a special condition of placing a public service advertisement and a fine of $100,000.
- True World Foods Inc.: forfeiture of $197,930 and a fine of $60,000.
- T.P. Company: one year probation with a special condition of placing a public service advertisement and a fine of $150,000.
The case was investigated by Special Agents of National Oceanic and Atmospheric Administration, Fisheries, Office of Law Enforcement; Food and Drug Administration's Office of Criminal Investigations; and U.S. Immigration and Customs Enforcement. Senior Trial Attorney Elinor Colbourn and Assistant U.S. Attorney Joseph Johns, Chief of Environmental Crimes in the U.S. Attorney's Office in Los Angeles, prosecuted the case.