A Placentia company and a vice president have pleaded guilty to federal charges related to a scheme to avoid the payment of Mexican tariffs on frozen shrimp sold to the country.
Pacific Shrimp Company, Inc. and Tony Zavala, a vice president of sales for the company, pleaded guilty Monday afternoon in federal court in Los Angeles. Both defendants acknowledged that they purchased shrimp from other countries, created phony documents claiming the seafood was harvested and inspected in the United States, and exported the seafood to Mexico without paying Mexican tariffs imposed such products.
Mexico normally imposes an import duty of at least 20 percent on all seafood imported into the country. However, under the North American Free Trade Agreement, seafood grown or harvested in the United States may be imported into Mexico duty-free. In order to avoid paying tariffs on foreign seafood, Pacific Shrimp and Zavala created bogus documents to make it appear their products were harvested in the United States, when they in fact had purchased the seafood from India.
Pacific Shrimp and its employees created certain United States Department of Commerce documents and certificates to make it appear their frozen shrimp products had originated in the United States. These falsified documents included United States Department of Commerce Certificates of Inspection, Export Health Certificates and Certificates of Origin.
For example, in May 2003, Pacific Shrimp and its employees made a fictitious Certificate of Inspection to export approximately 65,000 pounds of frozen peeled shrimp to Mexico. The bogus certificate falsely stated that the shrimp had been inspected by the United States Department of Health Services and that laboratory analyses did not detect the presence of Salmonella, Listeria, Yellowhead virus, Whitespot virus, Cholera or Chloramphenico. In fact, the shrimp had not been inspected or analyzed by any government agency prior to the export to Mexico.
As a result of this scheme, Pacific Shrimp and its Mexican customers avoided paying more than $100,000 in duties to Mexico.
Pacific Shrimp pleaded guilty to six felony violations: two counts of unlawful export of wildlife, two counts of falsifying a government document, and two counts of knowing use of a counterfeit government seal. Pursuant to a plea agreement with the government, Pacific Shrimp is expected to be placed on probation for five years and to pay a fine of $120,000. A portion of the criminal fine – $70,000 – will be earmarked for the Fish Genetics Program operated by the Southwest Fisheries Science Center, which is part of the National Oceanic and Atmospheric Administration. The Fish Genetics Program will collect tissue specimens from species such as sharks, billfishes and tuna, with a goal of expanding the existing fish DNA data base that is used to help protect and manage United States marine mammals and fisheries resources.
Zavala, 44, of Orange, pleaded guilty to use of a counterfeit government seal. The charge carries a maximum possible penalty of five years in federal prison, but the government has agreed to recommend a sentence of 10 months.
Both defendants are scheduled to be sentenced by United States District Judge John F. Walter on December 4.
This case was investigated by the National Oceanic and Atmospheric Administration, National Marine Fisheries Service, Office of Law Enforcement.