Icicle, Adak Fisheries settle 2004 violations for $615K

Andrew Jensen, Alaska Journal of Commerce

Feb 16, 2012 - 04:38 PM

Icicle Seafoods and Adak Fisheries have finally settled with the NOAA Office of Law Enforcement on a penalty for exceeding crab processing caps from 2002 to 2004.

A $3.44 million notice of violation and assessment, or NOVA, was issued against Icicle and Adak Fisheries in November 2004. A settlement agreed upon Jan. 31, 2012, was for $615,000.

The settlement stipulates both sides will be responsible for their costs incurred over the course of the case.

I’m still trying to track down the details, but another big-time Alaska seafood operation also settled a NOVA case with NOAA Office of Law Enforcement Oct. 26, 2011.

Peter Pan Seafoods, owned by Maruha Nichiro, agreed to a $525,000 fine for a NOVA issued against it and Seven Seas Fishing Co. on June 18, 2009. NOAA OLE didn’t publish a news release on that NOVA, but the original penalty on that case was about $4 million.

There’s more digging to be done on this story, particularly to find out how more than $7 million in penalties were settled for a little more than $1 million.

According to a recent update to the Commerce Department Inspector General review of NOAA Law Enforcement activities, all settlements are now reviewed at the highest levels of the General Counsel office, so somebody with a high pay grade had to sign off on both these deals.

Here’s the details on the original Icicle/Adak NOVA from the 2004 press release:

During the time period charged, Adak Fisheries purchased and marketed approximately 90 percent of all crab that Adak Fisheries Development processed. As a result of the control exercised by Icicle Seafoods, all crab processed by Adak Fisheries Development should be allocated against Icicle Seafoods crab cap limit. When this is done, Adak Fisheries Development processed over 3.8 million pounds of brown king crab in excess of Icicle Seafoods’ AFA crab cap for western Aleutian brown king crab during the same time period.

As a result of Icicle Seafoods' actions, non-AFA crab processors lost the market opportunity to conduct the processing of over 3.8 million pounds of brown king crab. The purchase price of the crab paid to the vessel for this crab was over $13 million. NOAA investigators said that the value of the processed crab would be greater than purchase price.

First wholesale revenue is typically about double ex-vessel value, putting the value of the processed crab involved in this case north of $26 million.