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Seafood Scam: Massive Fraud & Cover-up Exposed

  • Spence Cooper
  • June 12, 2009

The entire seafood industry is involved in a massive cover-up involving fraud, deception, mislabeling and substitution; the deception involves restaurants, retailers and cabal of sushi fish suppliers.

According to Isaac Wolf with Scripps Howard News Service, “Industry experts say fish fraud comes in a variety of forms: substitution and mislabeling at the restaurant level, misrepresentation by restaurant suppliers, and fraud by domestic fish importers and foreign exporters”

“Restaurants in four cities across the country have been caught charging patrons for top-notch seafood while actually peddling inferior fillets. A Scripps Television Station Group investigation in Kansas City, Mo., Phoenix, Baltimore and Tampa, Fla., found that in 23 out of 38 meals tested the fish species was incorrectly marketed and billed as fancier fare”.

The most extensive fraud involves the substitution of the far-less expensive fish tilapia with red snapper. Also high on the list is the mislabeling of Asian Catfish as grouper. “Such substitutions can save a restaurant a bundle — while red-snapper fillets cost around $5.20 a pound wholesale, tilapia goes for just $2.20 a pound, according to food commodity analysts,”writes Wolf.

“Among the places you are most likely to receive the wrong fish are sushi houses, according to the Scripps TV investigation. Scripps tested fish billed as red snapper at nine Japanese restaurants — eight in Kansas City and one in Phoenix. All of them substituted cheaper species, the reporters found. Sushi houses commonly serve Izumidai, a cheap tilapia specially processed to have a red hue so it resembles snapper”.

The Scripps investigation found:

— The president of an international restaurant chain, Bice Bistro, admitted to intentionally swapping catfish for grouper after NBC Action News KSHB-TV tested fish in Bice’s Kansas City, Mo., location.

JK Sushi in Phoenix changed its menus the day after ABC15 News KNXV discovered that the advertised red snapper was actually tilapia.

— The owner of the Baltimore restaurant Luna Del Sol apologized after ABC2 News WMAR found that the “grilled grouper” — priced at more than $25 — was in fact Asian catfish.

— When Acropolis Greek Tavern in Tampa, Fla., was caught serving catfish instead of grouper, the eatery’s owner told WFTS ABC Action News that the fish suppliers — and not him — were to blame.

Investigators who confront restaurant owners receive the same rehearsed suite of responses ranging from blaming the supplier, to the proverbial honest mistake, to outright defiance and arrogance as illustrated when “KSHB-TV in Kansas City, Mo., found that Bice Bistro was selling catfish instead of the advertised grouper at the Kansas City eatery, the restaurant chain’s president, Raffaele Ruggeri, admitted that his company regularly changes species without updating its menu.

“We would consider changing the name on our menu to accurately reflect all species of fish being served nationally but in no way will we change the product as we stand by its quality,”Ruggeri said in a statement. Bice Restaurant Holding owns 40 restaurants around the world, with locations in Naples and Palm Beach, Fla., Glendale, Ariz., as well as New York City, Chicago and Los Angeles, according to the company Web site.

We would consider?

“It’s a concern that no restaurant seems to be offering the right fish,” said Bill McCaffrey, spokesman for Chicago’s Department of Consumer Services. “It suggests that this is an accepted industry practice.” Indeed. There’s an entire seafood subculture that’s complicit in this industry-wide scam, and the fraud has been going on for years. In fact, the colluded deception is so pervasive and widespread, some restaurant owners who are caught red-handed don’t even bother to defend themselves: “Everybody’s doing it,”they say.

And why not? The three government agencies in charge of regulating seafood — The FDA, Customs and Border Patrol and National Marine Fisheries Service — don’t even bother to share information. Additionally, the FDA only inspects 2% of the seafood imports according to ABC2News. Obviously the word isn’t just out, the word has been out among suppliers and retailers — they consider the US seafood market open game; it’s as lawless as the wild west — like shooting fish in a barrel, if you’ll pardon the pun.

“There’s just an unbelievable amount of fraud being perpetrated on the American public,” said Joseph Johns, a Los Angeles federal prosecutor who broke up a fish-fraud ring last year. He says the scope of the problem is huge. “It’s high time somebody really (looks) into this.”

Fraud and deception aside, the far more serious aspect in all this massive deception is the potential hazard of fish toxicity to consumers. Delia Goncalves with ABC2News points out that Lisa Shames with the Government Accountability Office authored a report finding fish fraud is not only costing consumers, in some cases, it’s making them physically ill. “Seafood that was actually puffer fish was labeled monk fish and puffer fish has certain toxic qualities and actually made people sick,” Shames explained.

Genetic Barcoding

In August of last year, ABC News published a story about couple of teenagers who collected fish samples in stores and restaurants in New York City. They tested the samples with a genetic “barcoding” method devised by a father of one of the teenagers who is an “expert in genetic barcoding ” a system that produces a unique readout of a species’ genes similar to the black and white barcode stripes often used to identify items sold in shops”. Up a quarter of the fish were mislabeled. “In the worst cases, two samples of filleted fish sold as red snapper, caught mostly off the southeast United States and in the Caribbean, were instead the endangered Acadian redfish from the North Atlantic”.

They collected 60 fish samples and sent them to the University of Guelph in Canada. Of 56 samples that could be identified by a the DNA barcoding identification technique, 14 were mislabeled. In all cases, said ABC, the fish was labeled as a more costly type, apparently ruling out simple chance. It was the first known student use of DNA barcoding technology in a public market.

“We never expected these results. People should get what they pay for,” said Kate Stoeckle, 18, of the project with Louisa Strauss, 17. “We really like sushi and we’d take home fish samples and put them in alcohol,” Stoeckle said of fish bought in shops and restaurants in Upper Manhattan. “The DNA of fish from a sushi restaurant called “white tuna” turned out to be Mozambique tilapia, a cheaper variety often raised on fish farms. One restaurant offered “Mediterranean red mullet” but the DNA matched spotted goatfish from the Caribbean”.

Canada Scam – Red Snapper

The same exact red snapper scam is going on in Canada as well. Susan Sampson with The Star reports the “Canadian Food Inspection Agency is investigating fish fraud in sushi restaurants across Toronto. The agency is responding to a Toronto Star probe revealing that diners who order red snapper usually get tilapia, a cheaper fish”. In a Star investigation published last month, writes Sampson, 10 of the 12 sushi samples collected from restaurants across the city and listed on menus as snapper were actually tilapia. One listed as “red snapper from Japan” was seabream. The 12th was correctly listed on the menu as seabream but verbally identified as “Japanese snapper.”

“Misidentification of fish is a problem across Canada, according to Robert Hanner, a professor at the university who has led two studies on the subject. Red snapper, he notes, is the fish most often identified and labeled incorrectly. In most cases studied, Hanner says, cheaper fish were substituted for pricier species”.

Eel Labeling Scam

Fish fraud isn’t confined to just a few varieties. Yesterday, Japan Times reported on an Eel labeling fraud that involved The Metropolitan Police Department. “Hamashin Chairman Hayama Nakamura, 67, has admitted to breaking the law against unfair competition by falsely labeling 3,000 packs of grilled eel on May 22 last year and selling them to a Tokyo wholesaler for ¥1.71 million the following day”.

Thriving Black Market

Tim Hull with Courthouse News astutely points out that in America “packaged food has created a thriving black market for substituted seafood where consumers cannot tell a fillet of flounder from a slice of grouper or a cut of catfish. The federal prosecutor who prosecuted members of a smuggling ring that imported 10 million pounds of falsely labeled fish from Vietnam said such rip-offs are €˜anywhere you look within the seafood industry€˜.”

“Most consumers in this country are not going to notice the difference (between species), so people are blatantly being ripped off,” said Joseph Johns, chief of Environmental Crimes in the U.S. Attorney’s Office. “Americans may be particularly susceptible to falsely labeled fish scams. Not only do they eat comparatively less fish than many other nations, and so are relatively ignorant about seafood in general, they also tend to purchase and eat fish fillets-often frozen-rather than the whole fish. And even a refined American palate may not be able to distinguish one species from another owing to the chemicals and dies that saturate most supermarket-sold fish fillets”

Johns also claims fish scams aren’t only from abroad. Some domestic fish farmers have been caught passing off their farm-bred product as wild. “Just go to the grocer and look at the price difference between wild and farm-raised fish, and you’ll understand the incentive for unscrupulous people.”

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