SPRUCE HEAD, Maine — The former manager of one of the state’s largest lobster cooperatives had a clandestine arrangement with certain members of that organization to buy lobsters from them in cash and evade income taxes, according to papers filed by the federal government in court.
Robert Thompson, 53, of St. George pleaded guilty Thursday in U.S. District Court in Portland to one count of tax evasion and one count of violation of the Lacey Act, which prohibits the illegal sale of lobsters. Thompson could receive up to five years in federal prison for the more serious tax evasion charge as well as a $250,000 fine for that offense.
Sentencing will likely occur in the spring after the probation department compiles a background report on Thompson. The income that Thompson failed to report from 2008 through 2011 from those side sales totaled nearly $160,000.
The U.S. Attorney’s Office filed its version of the case on Thursday. Assistant U.S. Attorney Julia Lipez said Thursday that she could not comment on whether there is any investigation into tax evasion by lobstermen who made the side sales to Thompson rather than to the Spruce Head Fishermen’s Cooperative.
“The defendant entered into a clandestine arrangement with certain Coop members pursuant to which those members agreed to sell a portion of their lobster catch to the defendant for cash, rather than selling those lobsters through the Coop system,” the prosecution stated in its filing.
Under the cooperative system, lobstermen are required to sell all their lobsters to the organization. The cooperative employee on the dock helps unload and weigh the daily catches and issues boat slips to the lobstermen stating how many pounds had been landed. Those slips are then provided to the cooperative’s financial manager, who periodically issued checks to the cooperative members.
The cooperative would hold back some of the payment to cover expenses for the organization. At year’s end, members would get a dividend for any unused money from those holdbacks.
The U.S. Attorney’s Office maintains in its paperwork that Thompson would buy some of the lobsters directly from some of the cooperative members as they arrived at the dock. He would then issue them boat slips that did not include the amount he purchased.
Thompson, in turn, sold those lobsters to J.P. Shellfish in Eliot. J.P. Shellfish was the largest legitimate buyer of lobsters from the Spruce Head cooperative.
John Price, the owner of J.P. Shellfish, would record those purchases. He sent cash payments to Thompson via truck drivers, who would pick up lobsters at the cooperative. Thompson would then pay the cooperative members who had sold to him.
Price was sentenced Oct. 29 to 45 days in prison for illegal currency structuring and a violation of the Lacey Act because he knew Thompson did not have a wholesale seafood license to sell lobsters.
Thompson, however, did not report the income he earned from the sale of those lobsters.
The prosecution maintains that Thompson failed to report $61,363 in income on his federal income tax returns from those side sales in 2008, $48,735 in 2009, $29,203 in 2010, and $18,758 in 2011. The cooperative was paying Thompson an annual salary of $60,000.
The cooperative’s leadership had contacted police back in January 2012 saying they suspected Thompson of stealing lobsters. A video surveillance camera was installed when Thompson went on vacation. The investigation — which included the Knox County Sheriff’s Office, and National Oceanic and Atmospheric Administration — led to Thompson being arrested in October 2012 for felony theft.
Those charges were dropped by the state in May because for the case to proceed the district attorney’s office would have to turn over its evidence to the defendant and the U.S. Attorney’s Office had asked them not to do that as to not interfere with its probe. The U.S. Attorney’s Office and IRS then picked up the case.
Cooperative President Casey Morrill attended Thursday’s hearing, at which Thompson pleaded guilty. He said he was disappointed that Thompson was not charged with theft because the lobsters he sold to Price were the property of the cooperative.
He declined to comment about the allegations that some members of the cooperative were making those cash side sales to Thompson without the knowledge of the cooperative leaders.
There are about 56 members of the cooperative.
The Internal Revenue Service criminal division has been involved in the investigation, along with the U.S. Attorney’s Office. An IRS agent on Thursday declined comment on whether anyone else is being investigated.
In addition to the criminal penalties, Thompson has agreed to pay nearly $50,000 in taxes to the IRS on the unreported income.