A director of a salmon supply company has been ordered to carry out the maximum amount of community service after admitting fraudulently using the labelling of two other firms to pass off products to the high-end Russian market, following a four-year multi-agency investigation led by Aberdeen City Council.
Alistair Thompson, 70, was told to carry out 300 hours of unpaid work to the community to be carried out within ten months and was told by Sheriff Andrew Miller it was maximum community service he could impose before imprisonment.
It is believed to be the most significant food crime in Scotland – and one of the most significant in the UK – since the horse meat scandal. It is understood to be the first Environmental Health submitted case that has been successfully prosecuted for Common Law Fraud.
The Crown Office is pursuing a Proceeds of Crime case which is due to be heard at Aberdeen Sheriff Court on September 21.
Thompson, whose address was given in court papers as Mains of Park Cottage, Lonmay, and who was director of SEA-PAC Ltd, admitted one charge at Aberdeen Sheriff Court relating to 12 consignments totalling in the region of 288 tonnes of salmon by-products products and a profit of £210,250.
Aberdeen Sheriff Court heard Thomson fraudulently used the labels from two other companies which had been approved for exporting to Russia, Lithuania and Estonia.
The case relates to lack of traceability, relabelling and obtaining fraudulent certification for fishery product to indicate that it originated in an establishment that was authorised to export to Russia, which has a different standard than other countries.
Thompson admitted forming a fraudulent scheme where an employee removed the original labels for the salmon co-products in a consignment at Cleethorpes waiting to be sent abroad, transported the fraudulent labels to Cleethorpes, instructed the employee to apply the false labels to the consignment, and prepared false health and pre-export certificates for the consignments.
He also admitted purchasing the consignments of the salmon co-products knowing they had been falsely labelled and certified and arranged for them to be exported to Russia, Lithuania and Estonia.
The court heard the SEA-PAC Ltd employee fraudulently changed labelling on co-products (heads, back bones and bellies) to disguise their origin and indicate that they were eligible for the lucrative Russian export market. This fraud posed a risk to health in that the traceability had been destroyed, damaged the businesses whose identity had been stolen (one of whom was subsequently banned from exporting to the country involved) and risked the reputation of the Scottish and UK food and drink industry.
Aberdeen City Council commercial team manager Andrew Morrison said: “The actions of SEA-PAC Ltd in disguising the traceability of the fishery products by fraudulently changing labels and documentation had the potential to detrimentally impact on food safety of consumers as effective traceability is an essential part of the food safety requirements.
“It is vitally important that products can be rapidly traced if there is a problem and then removed from the food chain in order to protect public health. There are formal systems of international co-operation across the world to ensure that this is effective.
“If an issue had arisen in relation to the salmon that formed parts of this consignment had arisen, it would have been impossible for effective measures to be taken to protect the consumer.
“Consumers rely on trust in food businesses compliance with food law and businesses that erode this trust undermine consumer confidence. Although this fraud did not directly impact on UK-based consumers, it contributes to issues that undermine the trust of the consumer in the Scottish and UK food industry.”
The two companies whose identities were used by SEA-PAC Ltd were Fraserburgh Freezing Ltd, which was subsequently banned by the Russian authorities from exporting to the Russian Federation because it was wrongly implicated with sending it sub-standard products, and Shetland Products Ltd.
The sentencing was the culmination of four years of investigation, of which Aberdeen City Council dedicated two officers to the process, and financial assistance of £45,000 was provided by the Food Standards Agency, now Food Standards Scotland. Vital support was provided by Police Scotland in exercising a search warrant which included seizure of computers, phones, documents and cash, and the forensic examination of computer and phones. The investigation was also supported by other local authorities in Scotland and England, the Food Standards Agency in England, and DEFRA.
A spokesman for Food Standards Scotland said: “This sentencing of the director of SEA-PAC Ltd represents the culmination of a four-year investigation which uncovered large-scale food fraud. These sorts of activities threaten the excellent reputation of the world-renowned Scottish food and drink sector, and Food Standards Scotland will not tolerate abuse of the system.
“This is an incident of food fraud by individuals which has seen those involved brought to justice: it is neither a widespread issue nor representative of the salmon industry in Scotland. Food Standards Scotland will continue to support honest, legitimate businesses and help protect them from being tarnished by the illegal activities of a very small minority.
“Food producers have a responsibility to ensure food is authentic – in other words, that it is what it says on the label, and is what those buying it believe it to be, and also to help authorities by reporting suspicion of food fraud. Food Standard’s Scotland’s Scottish Food Crime Unit has been set up to detect and investigate this sort of fraudulent and wholly unacceptable activity and has fully supported Aberdeen City Council during this investigation.”
The supply of fraudulent product in to the Russian Federation excluded legitimate business from fulfilling these orders with the associated loss of revenues equivalent to the value of the fraudulent consignments. There were a total of eight UK businesses which processed salmon and were authorised for export of fishery products to the Russian Federation and the total potential value of Scottish salmon co-products is in the region of $80.5 million per annum.