FOR IMMEDIATE RELEASE
April 3, 1997

JUDGE FINES MASSACHUSETTS FISH COMPANY $4.3 MILLION; PERMANENTLY REVOKES FISH DEALER, VESSEL PERMITS IN NATION'S LARGEST FISHERY FRAUD CASE

An administrative law judge has ordered more than $4 million in fines and permanently revoked fishery permits held by two Cape Cod businessmen and various fishery corporations they own for violating federal fishing regulations, the Commerce Department's National Oceanic and Atmospheric Administration announced today.

The decision in the massive fraud case was rendered by Judge Peter A. Fitzpatrick yesterday. It is believed to be the toughest civil penalty and permit sanction ever ordered in a domestic fishery violation case. The violations occurred in waters off New England, where severely depleted groundfish and scallop stocks are undergoing a rebuilding process.

In his ruling, Fitzpatrick stated that, "James G. Spalt and Peter Spalt can not be trusted to act within the confines of the law applicable to the fishing industry... Therefore, these individuals must be barred from the industry and thus deterred from ever repeating such illegal conduct."

"We had a strong case and are pleased that these individuals will no longer handle federally regulated species," says Mitch MacDonald, the lead attorney in the government's case. "The decision also puts anyone else committing wide-scale illegal acts on notice that when caught, they will be removed from the fisheries."

"Scallop and groundfish stocks are at very low levels right now, and sticking with regulations intended to rebuild them is critical to the long-term health of these fisheries," agrees Andy Rosenberg, Northeast regional administrator of NOAA's National Marine Fisheries Service (NMFS). "The few people who choose to operate illegally can not be allowed to rob the people who are complying of the fastest possible improvement in the stocks," says Rosenberg, whose agency manages fisheries in federal waters.

I'm very pleased with the outcome of this case," said Terry Garcia, former NOAA general counsel and acting assistant secretary of Commerce for oceans and atmosphere. "Aggressive prosecution is the only appropriate agency response to cases of this magnitude to ensure that honest fishermen have an opportunity to continue to derive a living from the sea."

The decision brings to a close more than two years of investigation and court proceedings. In April of 1995, NMFS special agents began an investigation of the Spalt enterprises. In April of 1996 based on that investigation, NOAA enforcement attorneys MacDonald and Charles R. Juliand charged Peter and James G. Spalt, various corporations owned by the brothers, and 12 of their captains with more than 300 violations of federal fishing regulations in the illegal harvest and sale of millions of dollars worth of fish and scallops. The agency sought various permit revocations and more than $5 million in penalties.

Since that time, NOAA has settled the cases involving the captains. The government also won an interim revocation of the Spalt dealer and vessel permits in August of 1996, based on a probable cause finding that the revocations were necessary to protect the resource. This finding has been appealed by the Spalts in federal district court.

The businessmen have 30 days to appeal Fitzpatrick's decision to the NOAA Administrator. Charges in fishery violation cases are civil, not criminal. This finding can also be appealed in federal district court.

FACTS

• This case began in April 1996 when, after a year-long investigation by NMFS special agents, NOAA issued notices of violation and assessed penalties to those charged.
• The case involves more than 300 alleged violations of fishery regulations governing Northeast scallop and groundfishing during the 1994-95 fishing season including making false statements on required reports, buying or selling illegal groundfish, failing to comply with the vessel call-in program (effectively accruing extra fishing days), exceeding allocated days at sea (resulting in at least 115 illegal days fishing at sea), non-reporting, buying or selling illegal scallops, selling to a non-permitted dealer or buying from non-permitted vessels, fishing with too many crew members on scallop vessels.
• Those charged include James G. Spalt and Peter Spalt of Cape Cod; corporations owned by the Spalts to operate a seafood processing dealership and five fishing vessels operating in Fall River and Hyannis, MA (F/V Atlantic, F/V Corsair, F/V Gatherer, F/V Mohawk, F/V Osprey); and the twelve captains who worked on the fishing vessels for the Spalts.
• In May of 1996, NOAA sought interim suspension of the vessel and dealer permits. The judge granted that request in August 1996 finding probable cause to believe that more than 100 willful violations were committed by the two brothers through their corporations.

This final action by Fitzpatrick permanently revokes the dealer and fishing vessel permits involved in the interim action, as well as levying the following fines: