NC seafood company owner sentenced for prison for relabeling foreign crab meat as ‘Product of USA’

North Carolina news

(Photo credit should read BRENDAN SMIALOWSKI/AFP via Getty Images)

RALEIGH, N.C. (WNCN) – The owner of a North Carolina seafood processor was sentenced to a year in prison after federal prosecutors said he made employees repack millions of dollars’ worth of foreign crab meat into containers labeled “Product of USA.”

Phillip R. Carawan, the owner, president, and chief executive of Capt. Neill’s in Columbia, was sentenced Thursday by U.S. District Judge Louise Flanagan, in New Bern.

Carawan was sentenced to 12 months and one day in prison, followed by three years of supervised release, and is required to pay a $250,000 fine.

Capt. Neill’s Seafood Inc. must pay a $500,000 fine and received five years’ probation.

“Individuals and companies who seek to profit from the fraudulent mislabeling of seafood harm American fishermen and consumers,” said Assistant Attorney General Jeffrey Bossert Clark for the Justice Department’s Environment and Natural Resources Division. “We are committed to working with our law enforcement partners to hold accountable those who engage in seafood fraud and mislabeling.”

Capt. Neill’s and Carawan admitted that beginning at least as early as 2012, and continuing through June 16, 2015, Carawan directed company employees to repack foreign crab meat into containers labeled “Product of USA,” according to their plea agreements.

Capt. Neill’s then sold that meat to customers as jumbo domestically harvested blue crab.

The falsely labeled crabmeat was then sold primarily to wholesale membership clubs, but also to retailers. Capt. Neill’s and Carawan further admitted that during that time period, the retail market value of the mislabeled crabmeat they sold was $4,082,841.

Carawan and Capt. Neill’s purchased crab meat from South America and Asia to fulfill orders. Live crabs were not purchased.

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