New Bedford fishing mogul charged after undercover investigation
Carlos A. Rafael, owner of Carlos Seafood Inc., was charged with conspiracy and submitting falsified records to the federal government.
Federal officials arrested on Friday the owner of one the largest commercial fishing businesses in the northeastern United States after uncovering an alleged scheme in which he misrepresented and underreported his hauls, then sold truckloads of fish for cash.
Carlos A. Rafael, 64, the owner of Carlos Seafood Inc. with over 40 fishing vessels ported in New Bedford and Gloucester, and his bookkeeper Debra Messier, 60, were charged with conspiracy and submitting falsified records to the federal government.
“The charges arose out of an undercover investigation in which federal agents posed as organized crime figures interested in buying the fishing business,’’ United States Attorney Carmen M. Ortiz said in a statement.
Rafael allegedly lied for years about the quantity and species of fish brought in by his boats in order to evade federal quotas designed to guarantee the sustainability of certain species, Ronald Mullett, a special agent with the Internal Revenue Service, said in an affidavit filed in federal court on Friday.
According to the affidavit, after a newspaper article detailed Rafael’s efforts to sell his commericial fishing business, undercover agents “posing as a broker and two Russian immigrants already involved in organized crime’’ met with Rafael on June 3. During the conversation, Rafael allegedly offered to sell his entire operation — “the whole enchilada,’’ as he called it — for $175 million. The affidavit states Rafael then presented 2013 and 2014 financial documents showing $3 and $4 million in annual adjusted income, as well as a draft 2014 financial statement showing combined assets of about $21 million.
When asked by the agents how he could justify a $175 million asking price, Rafael allegedly pulled out a ledger labelled “cash’’ and then described how he sells fish to a buyer in New York, and how he would keep “deducting, deducting, deducting until it disappears,’’ according to the affidavit.
According to court documents, at the end of the first meeting, Rafael said:
“I could have to regret this to you [sic], because I don’t know you. You could be the IRS in here.
This could be a cluster-f***. So I’m trusting you. The only thing is, I open myself because both of you is Russians and I don’t think they would have two Russians [posing as agents].
F*** me – that would be some bad luck!’’
In that meeting and in subsuquent ones through the fall, Rafael further detailed his methods. He allegedly told the agents he earned $668,000 in less than six months through dealings with the New York buyer and smuggled some of the cash through Logan International Airport to Portugal, according to court documents.
During a meeting in January, Rafael and Messier allegedly described “the dance,’’ in which they would coordinate with boat captains to falsify federal forms meant to track the fish species caught and purchased by his business.
“Everybody in this company knows the scheme,’’ Rafael allegedly said, according to the affidavit.
Rafael and Messier were arraigned on Friday at U.S. District Court in Boston. Rafael will be held until his detention hearing on Wednesday. Messier was released on $10,000 unsecured bond.
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