Judge Seizes Four Vessels and
34 Permits From Codfather in
Latest Fraud Sentencing

Fisheries Advocates Question Whether Seizing This Small Fraction of Carlos Rafael’s Assets Could Allow Him to Profit From His Crimes

by Brett Tolley, NAMA

Boston, MA — A Federal judge has ordered the seizure of four fishing vessels and 34 miscellaneous fishing permits owned by Carlos Rafael, AKA the Codfather. This follows on the heels of Judge William Young’s Sept. 25 sentence condemning Rafael to 46 months in jail, 3 years probation, and over $200,000 in fines.

Judge Young’s decision represents a seizure of a small amount of Rafael’s assets. The Northwest Atlantic Marine Alliance questions whether, without further action from NOAA, Rafael could ultimately still profit from the crimes he pled guilty to in federal court.

The judge’s hands were tied by the level of penalty allowed under the constitution. NOAA, on the other hand, can and must do more. NOAA can act independently of the court and decide how to address the civil aspects of the Codfather’s severe crimes of fraud, corruption, and cheating the system. NOAA has the ability to seize all his fishing assets, as they have done in the past.

What NOAA does next with the Codfather’s assets will determine the future of the New England groundfish fishery for generations to come.

“His [Mr. Rafael’s] actions impacted the entire New England fishery. Essentially, his overall strategy was to use his financial leverage, which he generated through his illegal behavior, to preserve his business while other fishing businesses were collapsing around him,” said Judge Young in the recent court order.

The judge’s court order included a forfeiture of four fishing vessels and 34 permits. It should be made clear that the 34 permits included primarily non-groundfish permits (squid, summer flounder, scup, sea bass, etc). Only four out of the 34 permits included groundfish permits to access fish like cod, pollock, haddock, various species of founder, etc. which were the species used to commit the crimes. Meanwhile, the bulk of the Codfather’s groundfish empire is still in his family’s possession.

It should also be noted that the judge decided to avoid seizing other vessels because “they have scalloping permits and scalloping is not involved in this wrongdoing.” Yet it’s clear from NOAA’s permit database that three out of four of the vessels seized have scallop permits attached to them as well as many other limited access non-groundfish permits.

Why the boats and permits matter

Since the sentencing, brothers Richard and Raymond Canastra who own and operate the Whaling City Seafood Display Auction as well as the Boston Seafood Display auction, have offered Mr. Rafael $93 million for his fishing assets. The value of Rafael’s fines and forfeitures total to about $2.5 million, a mere fraction of what his business could sell for to the Canastras.

This potential deal is concerning because it doesn’t address the systemic problem that put Mr. Rafael in such a power position to begin with. What’s worse, it gives more power to another entity who is already controlling a big part of the region’s seafood chain.

During the sentencing, the US Attorney stated, “This was a concerted effort of Mr. Rafael to squeeze out smaller fishermen while trying to control the whole thing.”

Despite recommendations from fishermen throughout the region, NOAA has refused to put protections in place to ensure this squeeze won’t continue if another big player buys the Codfather’s assets.

Over the years, hundreds of New England fishermen and thousands of concerned citizens called attention to excessive consolidation and brought solutions to fisheries managers in order to protect the fish and the fishermen from such crimes as Mr. Rafael’s. In addition, thousands more weighed-in through networks of hospitals, universities, and institutional advocates. When totaled, this equated to over a billion dollars worth of seafood purchasing power affected by Mr. Rafael’s actions.

NOAA has the opportunity to prevent excessive consolidation by seizing Mr. Rafael’s assets separate from the criminal case. Their decisions will not only have a lasting impact on New England’s fishing communities but also for fishing communities around the country as this decision will set the stage for how we either allow or prevent ‘too-big-to-fail’ fisheries.

To do right by the fish, fishermen, and the public, NOAA should seize all Mr. Rafael’s permits and boats, and ensure these assets don’t go to any entity that currently have an excessive share (2% or over for any given groundfish species). Small and medium scale fishermen, as well as those who were put out of business due to Mr. Rafael’s crimes, should get a right of first refusal.

We acknowledge there are many calling for any revenue gained from asset seizure to be put toward supporting vessel-monitoring systems. But some of Mr. Rafael’s crimes happened after he landed his fish and come as a direct result of his influence and control of the entire seafood value chain. No amount of vessel monitoring will address the root issue. The only solution is to stop the policies that are allowing a few to control the rights to fish. If we’re serious about the marine ecosystem and the health of the ocean, we need to prioritize the monitoring of excessive consolidation and prevent too-big-to-fail entities in our fisheries.

We know how too-big-to-fail models undermined our banking and financial systems and NOAA now has the power avoid replicating this on the ocean.