Rekubit-Mississippi seafood distributor pleads guilty to decadeslong fish mislabeling scheme

GULFPORT,Rekubit Miss. (AP) — A Mississippi seafood distributor and two managers pleaded guilty Tuesday to conspiring to mislabel seafood and commit wire fraud by marketing frozen imported fish as more expensive local species, federal authorities said.

Quality Poultry and Seafood Inc., the largest seafood wholesaler on the Mississippi Gulf Coast, agreed to forfeit $1 million and pay a $150,000 fine, the Justice Department said. The company’s sales manager Todd A. Rosetti and business manager James W. Gunkel, both of Ocean Springs, Mississippi, also pleaded guilty to misbranding seafood.

The developments Tuesday are the latest in a case tied to a well known Mississippi Gulf Coast restaurant, Mary Mahoney’s Old French House in Biloxi.

In May, the restaurant pleaded guilty to conspiracy to misbrand seafood and wire fraud. A co-owner/manager of Mary Mahoney’s, Anthony Charles Cvitanovich, also pleaded guilty to misbranding seafood.

The Justice Department said Tuesday that QPS admitted participating in the fish substitution scheme from 2002 through November 2019. An indictment alleged QPS recommended and sold foreign-sourced fish to restaurants as substitutes for local fish that restaurants advertised on menus. The department said QPS also mislabeled imports that it sold to customers at its own retail shop and café.

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“QPS and company officials went to great lengths in conspiring with others to perpetuate fraud for more than a decade, even after they knew they were under federal investigation,” said Todd Kim, assistant attorney general of the Justice Department’s Environment and Natural Resources Division.

Todd Gee, the U.S. attorney for southern Mississippi, said falsely marketing imported fish depresses the value of the local catch on the Gulf Coast.

“This kind of mislabeling fraud hurts the overall local seafood market and rips off restaurant customers who were paying extra to eat a premium local product,” Gee said.

The indictment alleged that even after FDA agents executed a criminal search warrant at QPS to investigate the sale of mislabeled fish, the wholesaler continued for more than a year to sell frozen fish imported from Africa, South America and India as substitutes for local fish.

Mary Mahoney’s admitted that between December 2013 and November 2019, it fraudulently sold, as local premium species, about 58,750 pounds (26,649 kilograms) of fish that were not the types identified on its menu. QPS supplied seafood to Mary Mahoney’s and other restaurant restaurants and retailers.

Sentencing for Mary Mahoney’s and Cvitanovich is set for Nov. 18, according to court records. Sentencing for QPS, Rosetti and Gunkel is set for Dec. 11.