$2 Million Lobster Fraud Spills Into Federal Court; UPS Named Co-Defendant

By - October 19, 2018
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A lawsuit by a Sarco, Maine lobster wholesaler alleges a business partner in the company embezzled at least $1.5 million. That legal action has now been transferred to federal court as of October 17, with several defendants and RICO charges added. One of the new defendants on the lobster scheme is United Parcel Service (UPS) for its alleged failure to exercise proper controls over an employee and one of its locations as the embezzlement conspiracy unfolded.

The lawsuit alleges the business partner overseeing wholesaler Sea Salt Lobster  – Matthew Bellerose from Scarborough, Maine – set up a phony customer with another person and sent the fake client thousands of dollars in lobsters without billing him. The lobsters were subsequently resold, the lawsuit states. The federal charging document does not name to whom the lobsters were resold.

Bellerose joined the business partnership at Sea Salt Lobster a few months before the alleged embezzlement was discovered last summer. The man allegedly confessed to his business partners after they discovered the crime. He said he felt financial pressure to come up with the funds he needed to purchase his stake in the company.

The original lawsuit named Bellerose and his co-conspirator Vincent Mastropasqua from Portland, Maine. The two have been accused of working together to mail lobsters from Sea Salt to the phony customer ‘Mastro’s.’ Sea Salt has alleged that Bellerose did not produce invoices for many of the lobster shipments to Mastro’s. The lobsters that the customer was sent were resold. Bellerose and Mastropasqua allegedly pocketed at least $1.5 million and up to $2 million.

If they are convicted on conspiracy, embezzlement and RICO charges, each man could face at fines in the hundreds of thousands of dollars and at least 10 years in federal prison.

Wife Named in Federal Complaint

Amanda Bellerose, his wife, was added recently as a defendant in the federal lawsuit. It claims she was unjustly enriched by the $2 million embezzlement. The lawsuit alleges that she used the money coming in from the lobster embezzlement to book vacations in the Bahamas and Florida. She also bought expensive personal items such as handbags, Rolexes and cars.

The suit further states she made up text messages sent to Mastropasqua after her husband was cashiered from the company. The idea was for it to look as if she and Mastropasqua had nothing to do with her husband’s alleged embezzlement and the reselling of the lobsters. A judge at Superior Court was relying upon those texts when he ruled to lift an attachment on the bank accounts belonging to Mastropasqua and other holdings before the case was transferred to federal court.

A similar request by Amanda Bellerose was made to lift the attachment order on her assets, saying that some of the cash in a joint account with her husband are her assets. Her attorneys claim that Ms. Bellerose had no knowledge of any alleged theft, if it did occur.

UPS Fingered As Co-Defendant

The federal lawsuit has added UPS as a defendant, alleging that the corporation did not exercise proper controls over its business and over Mastropasqua, who was employed by UPS. Its location in Scarborough was used as the business address for the fictitious ‘Mastro’s’, as well as East End Transport, another firm that was run by Bellerose and Mastropasqua.

The lawsuit alleges that UPS drivers both heard and saw things at Sea Salt that were abnormal, and should have raised ‘multiple red flags about potential illegal activity.’ For example, the lawsuit document states a UPS driver said she was informed by Bellerose to cover up the return address label of some boxes of product that were shipped.

Also, Mastropasqua’s brother Anthony has been named in the suit, and it now alleges several civil violations of the RICO Act. The RICO Act is a federal law that is often used against organized crime rings. The statute can be used in some cases to impose civil penalties.

The lawsuit notes that one transaction in 2014 involved Anthony Mastropasqua who played a key role in the phony sale of $525,000 of frozen lobster tails. Laura White, the attorney for Sea Salt, stated the case was transferred to federal court and RICO was added because she and her client wanted to prove how the case was actually a conspiracy that involved several people.

From a Napkin Sketch To $20 Million in Annual Sales

Sea Salt Lobster was founded in 2010, having gone from a simple napkin sketch by the two founders to a $20 million per year business. The company has built a reputation in Maine for selling fresh, Maine-caught lobsters by the pallet, pound or trailer load. Their customers range from lobster shacks to food trucks to big box stores. The company also sells lobster rolls, freshly picked and cooked lobster meat, lobster bisque, and clam chowder.

In 2015, the growing company moved from the Saco Industrial Park into a much larger, 8000 square foot building on Route 1 in the same community. The new facility features holding tanks that can hold up to 60,000 pounds of live lobster. There also are several loading bays dedicated to shipping and a 75 seat restaurant that specializes in fresh Maine lobster.

It is unclear what effect the embezzlement headlines will have on Sea Salt Lobster. But as the conspiracy did not involve the two majority owners of the company, industry insiders believe the company will eventually recover from the scandal.

Geoffrey G. Nathan, Esq.

About Geoffrey G. Nathan, Esq.

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