Russians arrest crab mogul

Arkadi Gontmakher earned a fortune bringing Russian king crab to the American consumer.

His eight-year-old Bellevue company, Global Fishing, sold $148 million in seafood last year. And Gontmakher, an American citizen from Ukraine, has lived in high style, driving a Bentley and building a red-brick mansion atop a Bellevue hill.

In late September, Gontmakher was arrested and jailed in Moscow. He is accused of money-laundering and participating in a massive poaching operation that illegally exported millions of pounds of king crab to the United States, according to reports in the Russian press.

These allegations have cast a shadow on the king-crab markets just as the peak holiday sales season approaches.

Global Fishing is the largest U.S. importer of the Russian product, its crab sold in grocery stores across the country. But some U.S. industry officials report a new wariness about buying Russian product. And, at a time of international concern over declining fish stocks, Gontmakher's arrest underscores the challenges of sorting out legally caught from illegally caught seafood.

"It is very, very hard to trace a seafood product, and know everything about where it came from," said Jeff Lyons, a senior vice president at Costco, which sold some Global Fishing crab legs in the past but no longer buys from the company. "The hardest thing in the world is to know who to believe — and how to find out the truth."

Global Fishing officials, in a statement released to The Seattle Times, say that the company "has always sought to operate in a legal and ethical manner," and their 30-person business remains strong. They say all their crab has full documentation to the point of purchase, and has been inspected and cleared by Russian and United States agencies.

"We will continue to serve all our customers as fully as possible," the statement said. "Arkadi's family and colleagues are understandably shocked and suffering a great deal of emotional distress over Arkadi's continuing and unjustified detention by Russian authorities."

Cheap crab, high life

Russian king crab has flooded U.S. markets in the past decade, driving down prices to the dismay of Alaska crabbers and to the benefit of crab-loving consumers.

Gontmakher is the largest of those importers. In the first six months of this year, his company brought in 20 million pounds of Russian king crab — an amount roughly equal to this year's entire Alaska red-king-crab harvest, according to the Urner Barry Foreign Trade Database.

Gontmakher created his Bellevue company, Global Fishing, in 1999, building it on the foundation of another firm that exported poultry and other products to Russia. Global imports crab from the Russian Far East, where the freewheeling aftermath of the fall of communism brought a major escalation in unregulated harvests.

As Global's chief executive officer, Gontmakher has led a well-bankrolled, fiercely competitive operation that has offered some of the cheapest crab around.

"He rose very quickly, and everyone was always questioning where his money came from," said John Sackton, editor of Seafood.com News.

In the Puget Sound area, where millionaires often dress in bluejeans, Gontmakher, 50, cut an elegant figure in his well-tailored suits. To celebrate his birthday earlier this year, he held a big bash in Las Vegas.

He chose a prime site for his Bellevue home, acquiring a tract in the heavily forested Bridle Trails neighborhood in 1997. He clear-cut some of the trees, and was involved in legal battles with the city over land-use issues during the lengthy construction.

Only within the past two years did Gontmakher and his family finally move into the house, according to Dr. Rodger Hawkins, a neighbor who granted a sewer easement across his property and got to know the couple. Hawkins said he found Gontmakher to be a fair man who followed through on his financial commitments.

But many other neighbors were furious about the clear-cutting. They also disliked the 13,610-square-foot house, which includes a brick outer wall, ornate metal gates, marble fountains, twin lion statues at the front door and a large indoor swimming pool.

When a reporter arrived at the front gate of the house earlier this month, he was met by a woman who did not identify herself. She advised against writing a story.

"Everything in the Russian newspapers, it is all lies," she said, and then ended the interview.

Conspiracy alleged

Gontmakher's arrest comes amid President Vladimir Putin's broader push to reassert Moscow's control over natural resources. Some believe the arrest may also have political undertones as the government seeks to reward supporters and to crack down on businesspeople who have fallen out of favor.

Sackton, editor of the Seafood.com newsletter, said that Gontmakher, as an American businessman with Ukrainian roots, might have made a tempting target for Russian nationalists.

Global Fishing officials say the company does not catch its own crab but buys from other fishing companies.

The Russian government alleged that Gontmakher conspired with two Russians, Aziz Embarek and Alexander Suslov, two officials of Eastern Fish Resources, which operates a fleet of crab vessels. The three men are accused by the Russian government of moving some $200 million worth of poached seafood out of Russia.

Calls to Russian government officials in Washington, D.C., and Moscow for comment on the arrests were not returned.

U.S. Embassy officials in Moscow, citing privacy rules, declined to comment on the case or say whether they had visited Gontmakher.

The case also has drawn the scrutiny of U.S. fishery-enforcement officials. Based on earlier complaints from Alaska crab fishermen, they had already begun an investigation of Russian king-crab imports. Under the Lacey Act, the U.S. government has the power to pursue civil or criminal penalties or even seize seafood imports if there is documentation that they were illegally caught.

"We are working with our counterparts in Russia in a cooperative effort and with other U.S. agencies," said Mark Oswell, a spokesman for the law-enforcement agency of the National Oceanic and Atmospheric Administration.

Suspect permit process

For years, these Russian imports have worried U.S. crabbers. Some of these imports come from the Barents Sea, where transplanted king crab have flourished. The rest come from the waters off the Kamchatka Peninsula in the Russian Far East. In recent years, permits for the crab harvests have been auctioned off to the highest bidder, according to Russian news reports.

Bids for these permits sometimes far exceed the value of the crab that could be legally caught under the share system. Boats could then use the permit to stay on the water and haul out many times the allowable amount of crab. Much of the crab is then offloaded in foreign ports, appearing as a legal export when it arrives in the United States.

By some estimates, the amount of poached crab harvested in the Russian Far East is more than double the legal harvest. The small leg size of some Russian product sold in the United States indicated that young, undersized crab have sometimes been part of the haul.

"If we had landed crab like that in Dutch Harbor, [Alaska] we would have ended up in jail," said Tom Casey, a former Alaska crab skipper.

In 2005, some U.S. fishing-industry officials — and the Oceana conservation group — were disturbed by the small size of Russian king crab being sold at a Safeway in Juneau, Alaska.

"Though the market prices may be cheap, the price on America, Alaska fishermen, and our ocean environment is entirely too high," wrote Jim Ayers of Oceana, in a January 2006 letter to Safeway President Steven Burd to request the product be removed. Safeway then withdrew the crab from the Juneau store, according to The Juneau Empire.

Safeway spokeswoman Cherie Myers said in a recent interview that Safeway does not buy from Global Fishing.

Since the arrest of Gontmakher, Russian officials have pledged a broader crackdown on poachers. They also have talked about other reforms, such as ending the annual auctions, in order to bring harvest system under tighter control by Moscow. They say that many trade documents are being falsified, and have urged Japan and other neighboring countries to crack down on illegal Russian seafood products arriving in ports.

Meanwhile, in the United States, king-crab prices in wholesale markets have edged up, perhaps reflecting more uncertainty over Russian supplies. In the months ahead, some expect a further run-up in price.

Currently, most of the king crab in the retail stores is from Russia. But the U.S. red-king harvest is under way and American crabbers are hoping for a new marketing peg that will emphasize the U.S. conservation rules to prevent overfishing.

"This is legally caught, sustainable, Alaska king crab," said Arni Thomson of the Alaska Crab Coalition.

It may be tough to get that message to shoppers. Stores are under no obligation to note whether their crab comes from Russia or Alaska, although some do so.

Researchers David Turim and Katya Yefimova contributed to this story.

Hal Bernton: 206-464-2581 or hbernton@seattletimes.com