Department of Justice Examining Omega Protein Menhaden Operation

While the Atlantic States Marine Fisheries Commission has increased the catch limits for Atlantic Menhaden, the fish’s main nemesis finds itself in hot water. The Department of Justice is examining whether Omega Protein issued false disclosures to qualify for a $10 million loan, violating the terms of a federal financing program.

This is the third investigation of the company,  and follows two others for allegedly violating environmental law.

“The short answer is that we don’t make loans to applicants that have violated the law, and if they violate the law while a borrower, they face a default action and potential foreclosure,” Paul Marx, NOAA’s fisheries chief of its financial services division said.

According to a statement from Omega, “The government’s investigation concerns whether there has been or is a violation of the False Claims Act in connection with Omega Protein’s May 2010 certification to the U.S. Department of Commerce that Omega Protein’s Reedville, Virginia facility was in compliance with federal environmental laws in order to obtain a loan guarantee under the Department of Commerce’s Title XI loan program.”

Omega received a $10m loan with the Department of Commerce’s Fisheries Finance Program. The loan came with a 15-year maturity and a 5.73% interest rate, but has been since settled in full, Omega said in its Q3 earnings release.

Omega is not new to investigations. Improper wastewater discharge incidences have led to previous investigations. From 2008 to 2010 two Omega vessels regularly collected “bail water” from the plant and other vessels and discharged it too close to shore instead of going further out to sea as is required. Bail water is fresh water used to pump fresh fish from the vessels to the plant. It usually contains fish waste such as fins, scales and excrement as well as pollutants produced in processing. As part of the 2013 agreement, Omega plead guilty to two counts of violating the federal Clean Water Act. It paid $7.5m in fines and restitution, and was placed on probation for three years.