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Dongwon accused of fraud over tuna fishing licenses

Dongwon Industries is being accused of fraudulently getting around US vessel licensing laws using a scheme involving the nieces of Jae-chul Kim, chairman of the South Korean fishing group.

The company, parent of US tuna brand Starkist, allegedly set up sham ownership of tuna fishing vessels using Delaware-registered companies so it could obtain fishing licenses to fish in the exclusive economic zone (EEZ) of the Pacific Island Nations.

This is an area where US licenses are reserved for US-owned and managed vessels, according to Moore & Company, a lawfirm that filed the amended claim in the district court of Delaware on Jan. 10. The first claim was filed in November 2012.

The fraud continues through today with yearly misrepresentations to the US government and yearly renewals of the vessels’ documentation and fishing licenses, alleges the document.

The document alleges that one of the two vessels, Majestic Blue, maintained its US registration and FFA fishing licenses until it sank in June of 2010.

Pacific Breeze, the other vessel, continues to fly the US flag and “take advantage of the SPTT [South Pacific Tuna Treaty] fishing licenses to this day”, according to the claim.

These allegations are surfacing at a time when Starkist is engaged in a spat with Bumble Bee Foods over who can supply tuna for US government contracts, which have to be processed in the US.

Moore submitted an amended complaint Jan. 10 on the case, which it originally filed under seal in November 2012.

The crux of this most recent case is the Korean company’s alleged creation of puppet companies in order to illegally snag a license to fish in the Pacific island nations’ EEZ. It allegedly replicated this scheme every year since 2008 in order to continue its operations there.

Dongwon-owned vessels, Pacific Breeze and Majestic Blue, were registered in South Korea prior to 2008 and named Eastern Kim and Costa de Marfil, respectively, which would have excluded them from licensing eligibility, the claim document states.

Dongwon allegedly got around this by offering “investment opportunity” to the daughters of Dongwon chairman’s brother, Jaewoong Kim, who were US citizens.



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