Scallop scheme scuttled

FDA Consumer, Nov-Dec, 1997 by Paula Kurtzweil

A scheme to pass off water-soaked and chemically treated scallops as fresh, untainted products has landed a family-owned seafood company some hefty fines.

International Seafood Distributors Inc., of Gloucester County, Va., its president, Thomas Fass, and vice president, Irving Luie Fass--Thomas' father--were ordered in June in the U.S. District Court for the Eastern District of Virginia to pay fines and forfeitures totaling $120,000 for selling illegal scallops.

The company and the Fasses entered into a plea agreement March 7, 1997, each admitting guilt to a one-count criminal information. The company pleaded guilty to falsifying facts and trying to import products with false statements. Each of the Fasses pleaded guilty to selling misbranded seafood.

An investigation by FDA's Office of Criminal Investigations (OCI) and Baltimore district office and the U.S. Customs Service uncovered evidence that for more than a year the company puffed up scallops it sold with excess water to increase net weight--and thus net profit since scallops are priced according to weight.

Also to increase profits, the company treated decomposing scallops before sale with a chemical to cover up rotting odors and discoloration.

The health risk from eating the fraudulent scallops could not be determined, according to OCI special agent Dwight Rawls. But the company's practices constitute economic fraud. An informant told Rawls that the company carried out the scheme because "everybody was doing it, and [the company] had to do it, too, to stay in business," Rawls recalled.

The Fass family has been involved in the seafood trade for several generations, and its International Seafood company is the largest employer in Gloucester County, according to Rawls.

Until recently, International Seafood sold seafood mainly to overseas customers, although its clients also included other U.S. seafood companies, discount warehouses, and supermarket chains. The company has since voluntarily gotten out of the scallop business, according to Rawls, and now only exports a marine fish called bonefish.

FDA began its criminal investigation of International Seafood in May 1994, after Charlotte Wilkins, an investigator with FDA's Norfolk (Va.) resident post, notified OCI about two shipments of International Seafood's scallops that had been rejected by foreign governments because of excessive moisture content. FDA had detained the scallops upon their return because they weren't properly labeled but allowed International Seafood to keep the shipments at their plant so that they could relabel them. When Sylvia Dooling, another investigator with FDA's Norfolk resident post, tried to inspect the detained scallops in September 1993, International Seafood told her that the shipments had been sent to another state for storage.

In a series of interviews with current and former employees and business associates of the company, OCI and customs agents developed a list of several "cooperating individuals," Rawls said. At about the same time, two informants came forward. One said he wanted to report the company's practices because he felt guilty about carrying them out while an International Seafood employee. The other indicated that he wanted to exact revenge for the way he was treated at work, Rawls recalled.

Though their reports to customs and FDA were independent of each other, the informants verified parts of each others' stories. They explained how the company oversoaked scallops in water treated with sodium tripolyphosphate, or STP, a chemical that causes seafood to absorb water.

While FDA allows seafood processors to use STP, the water content of scallops treated with the chemical can't exceed 84 percent of the total weight. The water in International Seafood's scallops was above the legal limit, according to the informants.

Whenever STP is used, it must be listed on the product's label under ingredients. If the added water is 80 percent to 84 percent of the scallops' weight, the label must say "water-added scallop product," and the weight of the water must be specified.

One of the informants said the company didn't always disclose STP in the ingredient list when it had been added to a product, nor did it label the product as "water-added" when it should have been.

Informants also reported that the company treated decaying, darkening scallops with Anthium 200 (chlorine dioxide), an industrial metal cleaner, to lighten the color of the shellfish and give it a more appealing odor. Though small amounts of Anthium are approved for use on poultry, FDA has not approved it for use on seafood.

They also reported the company's practice of removing scallops inspected by the U.S. Commerce Department from boxes the on-site commerce inspector had marked as "approved" and returning the scallops to a pile awaiting inspection. One informant said this was to increase the chances of the uninspected scallops getting approved, too. Employees then filled the emptied boxes marked "approved" with scallops that the commerce inspector had rejected or not yet inspected. The uninspected or bad scallops were then shipped to customers.