Food Safety Magazine

News | January 31, 2020

Foreign Crab Meat Labeled as Product of USA Lands Seafood Company Owner in Prison

By Staff

Foreign Crab Meat Labeled as Product of USA Lands Seafood Company Owner in Prison

The owner of a North Carolina-based seafood company will spend time in prison after being convicted of falsely labeling and selling certain food products.

Phillip R. Carawan, owner, president, and CEO of Columbia, NC’s Capt. Neill’s Seafood Inc. was sentenced to 12 months plus 1 day in prison, followed by 3 years of supervised release, and he will have to pay a $250,000. These are punishments for committing consumer fraud. Between 2012 and 2015, he is accused of falsely labeling millions of dollars worth of foreign crab meat as “Product of the USA.” The crab meat was actually from South America and Asia.

Besides Carawan’s punishment, his company will also suffer consequences. Capt. Neill’s Seafood was sentenced to 5 years of probation and will have to pay a $500,000 fine. Restitution will be paid to persons whom the government confirmed purchased Capt. Neill’s jumbo crab meat between 2012 and June 2015. 

Carawan and his company were engaged in the purchasing, processing, packaging, transporting, and selling of seafood and seafood products, including crab meat and domestically harvested blue crab. He instructed his employees to repack foreign crab meat into containers labeled “Product of the USA,” which Capt. Neill’s then sold to customers as jumbo domestically harvested blue crab. The falsely labeled seafood, totaling $4,082.841, was sold mostly to wholesale membership clubs, but also to retailers. 

In his plea agreement, Carawan admitted that the fraudulence was committed because he and his company could not and did not process sufficient quantities of domestic blue crab to meet customer demand. They began using foreign crab meat from South America and Asia to make up for the shortfall and fulfill customer orders.

This case was part of an ongoing effort by the National Oceanic and Atmospheric Administration Office of Law Enforcement, in coordination with the Food and Drug Administration, and the Department of Justice to detect, deter, and prosecute those engaged in the false labeling of crab meat.

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