Ex-National Fish and Seafood Boss Sentenced for Tax Fraud
The founder and former president of National Fish & Seafood Inc. (NFS), a major frozen seafood processing company based in Gloucester, Massachusetts, was sentenced on April 27 for failing to pay taxes on approximately $2.9 million in income earned from 2006 to 2013 – money which the defendant agreed was fraudulently diverted from NFS.
Senior United States District Court Judge Douglas P. Woodlock sentenced Jack A. Ventola, age 71, to two years in prison and one year of supervised release, and ordered him to pay a $75,000 fine and restitution of $1,073,470 to the Internal Revenue Service. In December of 2017 he pleaded guilty to seven counts of making and subscribing a false tax return.
Ventola was a 40% stakeholder of National Fish & Seafood, which producers a wide line of products for retail and foodservice customers ranging from fish fillets, appetizers and shrimp, to imitation crab; crunchy breaded seafood and fish products, value packs, raw fillet header bags, stuffed clams, breaded flounders and much more.
Founded in 1979, it has operated as a subsidiary of Pacific Andes since the late 1990s, when the Hong Kong-headquartered holding company took a 60% stake in the operation.
National Fish employed the services of a temporary labor company, Continental Labor Team Inc., which Ventola controlled.
In cahoots with three co-conspirators [two National Fish executives and an accountant], Ventola channeled more than $5 million in tax-free money from National Fish, through Continental, into his personal bank accounts, according to the Boston-based US Attorney’s Office for the District of Massachusetts,
One of the co-conspirators is said to have prepared fraudulent invoices for work supposedly done for Continental by IFS, a shell company. Ventola and his collaborators used the fake IFS invoices to obtain payments from Continental, which they deposited into Ventola’s personal bank accounts.
The US Attorney’s Office said that during the later years of the scheme, the money was directed from Continental into an account Ventola controlled in the name of yet another shell company, Nordic Investments. From the various accounts, Ventola paid personal expenses and also wrote checks to his co-conspirators, or to shell companies they controlled.
In addition to this income, Ventola received regular kickback payments from a shrimp repackaging company in Texas that performed services for National Fish, according to the US Attorney’s Office. It added that from 2008-14 Ventola caused those payments, which exceeded $400,000, to be deposited into bank accounts he controlled, but he did not report that income on his tax returns.
US Attorney Andrew E. Lelling and Kristina O’Connell, special agent in charge of the Internal Revenue Service’s Criminal Investigations in Boston, made the sentencing announcement. Assistant US Attorneys Stephen E. Frank, chief of Lelling’s economic crimes unit, and Brian A. Pérez-Daple, a member of the criminal division, prosecuted the case.
What Now for NFS?
The prison term was handed down despite pleas for leniency made by a number of parties, including a leading executive from the company that Ventola admitted to defrauding.
“The alternative sentence of incarceration, depriving NFS of Mr. Ventola’s day-to-day leadership, would likely cause the demise of NFS,” said defense attorney Derrelle M. Janey. “This view is held not only by employees, but by the majority shareholder, Pacific Andes International Holdings, which has submitted a letter to the court pleading for Mr. Ventola’s continued ability to work for the company.”
He added that neither NFS nor Pacific Andes have outstanding issues with Ventola, as he has promised fully repay money owed to the company.
In a letter presented to the court, Jessie Ng, managing director and executive director of Pacific Andes, wrote that Ventola “singularly possesses the experience, knowledge, and employee leadership required for NFS’ survival. Jack’s continued employment as a senior executive of National Fish is, in my opinion, essential to our efforts to turn that company around. Furthermore, without Jack’s presence at such a critical juncture, I am deeply concerned about the future of National Fish. The very livelihood of the many employees at National Fish is dependent on the future of National Fish being secured.”
Assistant US Attorney Pérez-Daple’s thinking on the matter was expressed as follows: "Pacific Andes’ plea for leniency is, on its face, motivated by a desire to protect its investment in National Fish...The government is sympathetic and understands that collateral consequences sometimes appropriately factor into a court’s sentencing determination (though the court need not accept Ng’s projections about those consequences; National Fish could yet be acquired by another company, as it was by Pacific Andes in the 1990s). But it is tax fraud, and the appropriate sentence for that crime, that is before the court, not the viability of Pacific Andes’s investment in National Fish. While the potential collateral consequences to Pacific Andes may be relevant to the court’s determination, they should not be given undue weight."
Judge Woodlock apparently agreed with the prosecutor has he pronounced the prison sentence.