Pinecrest, Florida, U.S.A.-based Frama Seafood has been ordered to paid more than USD 1 million (EUR 891,400) in compensation following a judgment in a lawsuit filed by one of its customers.
San Diego, California, U.S.A.-headquartered Lotus Seafood sued in 2016, alleging Frama sold it underweight and poor-quality salmon on three separate occasions. In a decision made in October 2018, Judge Eddie C. Sturgeon of the Superior Court of San Diego County, California, found that Frama had defrauded Lotus and awarded USD 875,365 (EUR 778,400) plus interest and the cost of its litigation, with the total award valued at USD 1.03 million (EUR 918,000).
A counter-suit by Frama against Lotus for fraud and breach of contract was dismissed by the judge hearing the case.
According to the case file and to interviews with Lotus Seafood CEO Nick Ovchinnikov and COO Sergey Nikolenko, after being introduced to Frama and its representative, Amado Rodriguez, via an agent in Miami, Lotus contracted with Frama to provide it three shipments of salmon from Chile over three months. The three shipments were all late and underweight, and the salmon was of increasingly inferior quality, with the second and final loads containing salmon that was decomposing.
“An inspection in Chile showed the shipment was in exact accordance to specification, but they must have switched the lots right before the loading,” Nikolenko told SeafoodSource. “What arrived was decomposed, green salmon – really green. We couldn’t believe what we saw.”
After the second shipment, Lotus informed Frama it had breached their contract, but Frama said it would provide a guarantee that its future seafood shipments would be of acceptable quality and quantity. That guarantee came in the form of a check to Lotus for USD 30,000 (EUR 26,700) provided by Agromar Spa LLC.
Lotus agreed to take the third shipment but it, too, came in underweight and of inferior quality. An inspection of the shipment by Bureau Veritas confirmed the salmon it contained was “found in bad condition and unsuitable for human consumption.”
“The whole shipment was bad – significantly worse than even the other two. The color, smell was terrible. It was not suitable for consumption,” Nikolenko said.
Meanwhile, the check provided by Agromar Spa did not clear when deposited, as it was drawn on a closed account. When Lotus did not pay for the third shipment, Frama filed a claim with Lotus’ export credit insurer, which resulted in Lotus losing its credit and having its trading partners informed that it was an unsafe risk.
Nikolenko said the company lost three clients as a result of Frama’s actions, and other potential business as a result of its loss of credit and the unfair sullying of its reputation.
“We lost a lot of business. It’s the first time we experienced anything like this on this scale,” Nikolenko said. “In our opinion, this was criminal activity.”
Thus far, Frama and Rodriguez, as company principal, have not paid the amount awarded in the judgment. Rodriguez has not yet responded to a SeafoodSource request for comment. Multiple attempts to contact Agromar Spa LLC, now doing business as Sigma Foods Miami LLC, were not successful.
Ricardo Baeza, who Nikolenko described as a representative of Agromar in the lawsuit (though he denied being connected to the company in a Seafax report), was previously implicated in two cases of fraud involving seafood – one valued at USD 429,000 (EUR 382,400) involving king crab from Chile sold to a Chinese entrepreneur, and one estimated to be worth USD 665,690 (EUR 593,410), according to a report from Chilean television program TVN.
Rodriguez was also previously implicated in a criminal case involving seafood mislabeling and violations of the Lacey Act, a U.S. law banning trade in illegal wildlife. In 2014, True Nature Seafoods, where Rodriguez worked as president, was found guilty in federal court of importing more than 11,000 pounds of steelhead trout, which was then sold to customers in the United States as Atlantic salmon. The judgment required True Nature Seafoods to pay a fine of USD 500,000 (EUR 445,700), an additional USD 250,000 (EUR 222,850) in community service payments to nonprofits in Florida, and forfeit 43,150 pounds of Patagonian toothfish valued at USD 400,863 (EUR 357,322) seized by the U.S. government in 2010.
In its reporting on the Lotus lawsuit, Seafax found that the Pinecrest office formerly used by Frama Seafood is now vacant, and that Florida state records show Rodriguez is now operating as the manager of Sake-Wa LLC, the owner of Kuenko LLC. On his LinkedIn page, Rodriguez identifies himself as being affiliated with Kuenko, a food business in the Miami area. A person answering a call to Kuenko’s listed phone number confirmed the business is a food truck that has been in operation for the past three years. The person described Rodriguez as the owner.
Lotus CEO Nick Ovchinnikov told SeafoodSource he doubts his company will be ever be compensated by Rodriguez and Frama, but that he wanted the broader seafood industry to be warned about Frama’s business practices.
“We know it will be really hard to collect, but we want other guys to stay away,” he said. “From what we know, they’re still doing business, and apparently, nothing prevents them from setting up a new company and keep doing what they’re doing. We warn other guys in the industry to be careful and not to get into deals with Amado.”
