Fish Dealer Fined $276,000 for Fluke Fraud

Long Island Fish Dealer Pleads Guilty to Fluke Fraud

Jones Inlet Seafood Co., a federally-licensed fish dealer located in Point Lookout, New York, and its company president, Michael G. Mihale, have pleaded guilty to federal felonies stemming from their role in systematically underreporting fluke (summer flounder) that was being harvested as part of the federal Research Set-Aside (RSA) Program.

As part of the plea deal, Jones Inlet Seafood Co. and Mihale agreed to pay between $222,000 and $276,000 in combined fines and restitution. The company also agreed to make a $30,000 community service payment to the Cornell Cooperative Extension of Suffolk County in order to pay for the enhancement of fluke habitat through the C.C.E.’s Marine Meadows Program.

The company’s vice-president, Bruce Larson, Jr., also pleaded guilty to one count of wire fraud and one count of falsification of federal records. Jones Inlet Seafood Co. pleaded guilty to the falsification of federal records charge as well as one count of Lacey Act False Labeling for the knowing use of false documents in connection with approximately $100,000 worth of fluke that was shipped to customers in Connecticut and New Jersey.

The three defendants agreed to be subject to a ban on Mihale and Larson, Jr. from holding a federal dealer license, accessing the National Oceanic and Atmospheric Administration’s (NOAA) SAFIS computer system, participating in the RSA program, or being in a position to direct others to complete dealer reports. Jones Inlet also agreed to increased recordkeeping and auditing requirements.

The court will hear sentencing recommendations regarding non-agreed terms at a hearing set for Jan. 12, 2015. The case is a result of a probe into the abuse of the RSA Program, which was uncovered after it was discovered that Anthony Joseph, captain of the F/V Stirs One, was consistently overharvesting fluke through Joseph’s abuse of the program.

Mihale and Larson, Jr. were involved in a scheme to direct unwitting subordinates to falsify and submit at least 65 fisheries dealer reports from June 2009 to December 2011, defrauding the United States of 56,000 pounds of overharvested and underreported fluke valued at $116,000.