April 2011

FinalCut: Ocean Fresh Owner Gets Five Years for Defrauding Wells Fargo

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The U.S. Attorney’s office in the District of Massachusetts, announced that Ocean Fresh Seafood owner Robert Coutu was sentenced to five years in prison for his role in defrauding Wells Fargo Business Credit of about $7 million. Coutu, 53, pleaded guilty in September 2010. He was charged with conspiracy to commit bank fraud, bank fraud and money laundering. Presiding in Boston, a federal judge sentenced Coutu to 60 months plus three years of supervised release. He must also repay Wells Fargo Business Credit (now Wells Fargo Capital Finance) over $6.5 million.

Coutu was the owner and president of Ocean Fresh, headquartered in North Attleboro, MA. In 2002, Wells Fargo extended a line of credit, which was secured by Ocean Fresh’s A/R and inventory. In 2005, Coutu, assisted by various Ocean Fresh employees, began to falsely inflate receivables and inventory balances in order to borrow millions of dollars beyond the company’s actual business activity. Coutu and others created false invoices and wired funds from Ocean Fresh’s bank account to those managed by Coutu’s affiliates to create the appearance that Ocean Fresh was buying and selling more product than it actually was.

When Wells Fargo’s auditors conducted their quarterly reviews at Ocean Fresh, Coutu and his employees showed them the fabricated paperwork. Coutu also stuffed the freezers with “borrowed” low-value seafood, and directed his employees to mislabel it as high-value seafood.

Ocean Fresh’s former controllers, Christopher Day and Cynthia Larose, were indicted for conspiracy to commit bank fraud. Larose pleaded guilty and received three months probation for her role. Day is awaiting sentencing. In a related case, Coutu’s former accountant pleaded guilty to misprision of felony and was sentenced to three years probation.

U.S. Attorney Carmen M. Ortiz, William P. Offord, Special Agent in Charge of the IRS, Criminal Investigation, Boston Field Division, and Richard DesLauriers, Special Agent in Charge of the FBI, Boston Field Division made the announcement on February 23. This case was prosecuted by Assistant U.S. Attorneys Sarah E. Walters and Vassili Thomadakis of Ortiz’s Economic Crimes Unit.