Fish Stick Nation Perfect Target for Seafood Fraud

     LOS ANGELES (CN) – American cooking custom that relies on packaged food has created a thriving black market for substituted seafood where consumers cannot tell a fillet of flounder from a slice of grouper or a cut of catfish. The federal prosecutor who prosecuted members of a smuggling ring that imported 10 million pounds of falsely labeled fish from Vietnam said such rip-offs are “anywhere you look within the seafood industry.”

     “Most consumers in this country are not going to notice the difference (between species), so people are blatantly being ripped off,” said Joseph Johns, chief of Environmental Crimes in the U.S. Attorney’s Office.
     Peter Xuong Lam, 49, the prison-bound former president of Virginia Star Seafood Corp., imported more than 10 million pounds of falsely labeled fish from Vietnam in recent years as part of a far-reaching conspiracy to avoid tariffs and dupe consumers into thinking they were buying high-quality fish.
     Americans may be particularly susceptible to falsely labeled fish scams. Not only do they eat comparatively less fish than many other nations, and so are relatively ignorant about seafood in general, they also tend to purchase and eat fish fillets-often frozen-rather than the whole fish, Johns said. And even a refined American palate may not be able to distinguish one species from another owing to the chemicals and dies that saturate most supermarket-sold fish fillets, Johns said.
     It would be difficult even for a chef to tell the difference, Johns said.
     According to a 2007 report in the journal “Marine Policy,” more than one-third of all seafood imported to the U.S. (and the U.S. imports about 80 percent of its seafood) is mislabeled.
     In the Lam case, U.S. and Vietnamese companies conspired to import $15.5 million worth of catfish illegally labeled and imported as sole, grouper, flounder, snakehead, channa and conger pike. The frozen fish was actually Pangasius hypophthalmus, a catfish sold under the names swai or striped pangasius. There has been an anti-dumping duty on Pangasius hypophthalmus from Vietnam since 2003, when U.S. catfish farmers complained the fish was being imported at less than fair market value.
     But fish scams aren’t only from abroad. Some domestic fish farmers have been caught passing off their farm-bred product as wild, Johns said.
     “Just go to the grocer and look at the price difference between wild and farm-raised fish, and you’ll understand the incentive for unscrupulous people.”
     Wild fish typically costs $2 to $3 dollars more per pound than farm-raised fish, but often commands far higher prices. Farm-raised fish is ubiquitous in supermarkets these days as overfishing continues to deplete the world’s wild-fish population, a reality that is only going to increase-alongside the number of fish scams-as demand for seafood goes up along with the planet’s population, Johns said.
     “You are going to see wild natural fisheries decline and an increase in farmed fish,” he said.
     Lam was sentenced to 5 years in prison and ordered to pay more than $12 million in anti-dumping duties for his role in the Vietnamese conspiracy-one of the longest sentences ever for this growing crime. A Virginia-based fish importer involved in the scheme, 64-year-old Arthur Yavelberg, was sentenced to 1 year of probation.
     They are among a dozen people and companies convicted of importing mislabeled fish to avoid federal tariffs in recent years, the U.S. Attorney’s Office said in a statement. The alleged organizer of the conspiracy, Henry Nguyen, is a fugitive and is believed to be in Vietnam.
     Lam was convicted in October of conspiring to import mislabeled fish to avoid federal import tariffs, and three counts of dealing in fish that he knew had been imported illegally. Yavelberg was convicted of a misdemeanor conspiracy count at the same trial. Both were sentenced Tuesday by U.S. District Judge Philip S. Gutierrez.

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