The Cape Ann Seafood Exchange expects to resume landing fish Tuesday, almost two weeks after the U.S. Labor Department effectively shuttered the business by seizing its bank accounts because of unpaid court-ordered damages.
Kristian Kristensen, the owner of the fish auction on 27 Harbor Loop, said Thursday night that he had received final paper work from Labor Department officials that unfroze his business and personal bank accounts.
“Now we can start putting things back in order, pay some people and hopefully start landing fish again on Tuesday, the day after the holiday,” Kristensen said. “That’s the plan.”
Kristensen credited the assistance of U.S. Rep Seth Moulton’s office, state Senate Minority Leader Bruce Tarr and state Rep. Ann-Margaret Ferrante in helping mediate a new consent order and payment schedule with the Labor Department.
“I’d have to say they’re at least 70 percent responsible for getting this done,” Kristensen said. “Without their help, this probably wouldn’t have happened.”
The seizure of the bank accounts stemmed from a 2016 lawsuit filed by the Labor Department against Kristensen and his two businesses, Cape Ann Seafood Exchange and Zeus Packing Inc., both at 27 Harbor Loop. The lawsuit sought $407,996 — $203,998 in unpaid back wages owed about 130 employees and an equal amount in liquidated damages.
Kristensen paid the back wages, but was in arrears on the damages.
“Because of defendants’ continuing failure to pay the workers or at least agree to meet with the department to discuss how to satisfy the judgment, the department filed a writ of continuing garnishment, which the district court approved on Aug. 14,” the Labor Department said through a Labor Department spokesman.
The writ demanded the bank withhold up to $189,868 from Kristensen’s business and personal accounts. It ended up garnishing $161,029.
The consent order returns all of the garnished funds except for $5,000 that had to be sent to the Labor Department within five business days of the Aug. 28 order. It also “commits the defendants to a payment schedule that will deliver $103,000 for the workers by the end of 2018 and the remainder thereafter.”
The consent order also compels Kristensen and the businesses to pay half of any federal tax refunds received on their 2017 returns. It also assigns to the Labor Department all rights to any funds Kristensen might receive from Gloucester fisherman Joe DiMaio in the settlement of the lawsuits each filed against the other earlier this year.
Kristensen first noticed something amiss with his bank accounts on the night of Aug. 17, a Friday. He began receiving text alerts from his bank that his accounts had fallen below $25.
“I didn’t know what was going on,” he said. “I thought I might have been hacked.”
He put the pieces together the next day, knowing he would be unable to pay his employees or the fishermen landing their catch. The business effectively went dark, forcing fishermen who usually land fish there to begin landing at Ocean Crest, 88 Commercial St., and Fishermen’s Wharf, 37 Rogers St.
Kristensen began negotiating with officials from the Labor Department’s wage and hour division, but that only moved the ball about halfway to a resolution, he said. On Monday, he met again with the Labor officials at Moulton’s district office in Salem, accompanied by Tarr and Ferrante.
“I really can’t thank them enough for the help they gave us,” Kristensen said. “Now I just want to get back to work.”
Contact Sean Horgan at 978-675-2714, or firstname.lastname@example.org. Follow him on Twitter at @SeanGDT.