All language subtitles for American Greed s12e17 Somethings Fishy The Codfather.eng

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In this episode of American Read, it's a
dangerous job.

But Carlos Rafael, a .k .a. the
Codfather, makes a killing in commercial

fishing. His secret?

Lying and cheating.

This is his way of life, to break the
law repeatedly.

Rafael is salty.

Look at me.

He's really kind of a character. He's
very funny. He's really profane.

And he can't stop bragging, which makes
the Codfather easy

to catch on tape.

But how will the feds respond when they
learn that Codfather's secret sauce

includes a sheriff's deputy smuggling
cash?

You have to understand, that's where 9
-11 started, Boston Logan Airport.

And now we're hearing about a law
enforcement officer circumventing

that same airport.

New Bedford, Massachusetts is a small
port city that typically attracts

and fishermen.

But in June 2015,

two self -described Russian mobsters
show up in town.

They say they are looking for a place to
stash more than $100 million in cash.

Their best bet is Carlos Rafael.

the crude boss of the new Bedford
waterfront, who has a fleet of 32

boats worth millions.

The Russians tell Raphael they want to
buy his business, but first, they need

see his books.

In response, Raphael makes a joke.

You could be the man I am, and this
would be a problem.

And then he thinks again.

The Russians laugh, but the joke is on
Rafael.

They are the IRS, and this undercover
operation is off to a good start.

They are now confident they will learn
the secrets of the man who has earned

nickname the Codfather.

Rafael's story begins in the Azores
Islands off the coast of Portugal, where

is born.

In 1968, he convinces his family to move
to America.

He came here from Portugal approximately
at the age of 15.

He doesn't have much education. He
doesn't really know the language. He

job on the docks in New Bedford, and he
just stays there.

In coming to New Bedford, Rafael's
family is following generations of

fishermen. who have come to this famous
port.

It was once the center of the whaling
industry.

But when whaling dies, the money here
moves to what is called ground fish,

paddock, flounder, and the fish that
America was founded on, cod.

Cod was the reason a lot of the
colonists came here because they were so

abundant.

It was literally the first industry in
the country.

By the 1970s, when Raphael is settling
into New Bedford, enormous factory ships

from around the world are close by,
making off with millions of pounds of

each day.

They would process fish 24 hours, 7 days
a week.

Fishermen who were around at that time
said it looked like Manhattan out there.

There were so many lights of the boat
parked, even just 60 or 70 miles

The fleets of foreign boats are legally
in international waters.

But the presence of Soviet fishing boats
lurking just offshore does not sit well

with Americans.

And so in 1976, Congress kicked out the
foreigners and establishes a zone of 200

offshore miles as exclusive to the
United States.

And then the government offers
subsidized loans to U .S. fishermen.

Now they had to build up the American
fisheries because we were nothing, and

they just started handing out free
money.

At the time, Jim Kendall is well into
his career as a scallop fisherman.

Anybody who wanted to build a boat and
find a small dial payment could go get

it. And that is when Carlos Rafael
launches his career in the fishing

For a young Azorean like Carlos, the
vector was a place of opportunity, and

certainly took advantage of that.

While working as a fish cutter, Rafael
gets a loan in 1980 and opens Carlos

Seafood, a fish processing plant.

Soon after, he buys his first boats,
perfectly positioning himself to rake in

big money.

He has his own captains on his own boat,
catching the fish.

When those fish come into port, those
boats are selling the fish to his own

business.

And his timing could not be better.

His introduction to being a fishing
operation in New England was

the chaos of sort of a free -for -all.
And the message,

quite literally, was there's a lot of
fish out there to catch. Go catch them.

And while Rafael may enjoy fishing for
fun, for business, he sends his captains

out to catch the fish.

He stays on the shore.

No, no, he was never a true fisherman.

Carlos was a lot of things, but that's
one thing he can't claim.

And for many, that is a significant
distinction.

Because professional fishermen are
people who routinely head out into

treacherous waters.

in what is still one of the most
dangerous professions in the country.

People who've been out at sea, they
learn humility.

You look at a big wave or a big storm,
you understand humility.

And most every fisherman I know has that
humility.

There's not an ounce of humility in
Carlos Rafael.

Almost everyone who meets him learns
that.

As he tells the IRS undercover agents,
he is among the smartest guys on the

docks.

And one

of the most important things Rafael

knows is that to succeed, he needs lots
of boats.

Bigger is always better.

When you got 99, you still operate.

He's really kind of a character. He's
sort of a loud, boisterous guy. He's

funny. He's really profane.

He is memorable.

As Carlos Ravel's business grows, it
appears that his story is a classic tale

an immigrant achieving the American
dream.

There's a young man who moved here.

From his homeland, he had a very young
age with little formal education and

worked some very hard jobs on the dock
and eventually saved money to build up a

business. And that's laudable in the
most fundamental ways that we Americans

value.

But Rafael's story is more complicated.

Early on, people who do business with
him learn to be careful.

Well, if I shook hands with him, I guess
I'd count my fingers after I got

through shaking hands with him based on
his reputation.

It is no secret that Raphael will agree
to pay a price for a load of fish at the

morning auction, but it is often not a
final price.

The one time that Carlos bought my trip,
I actually ended up not selling to

Carlos.

because he tried to cut the price that
he had agreed to pay, and I refused to

let him do so.

Rafael says he is just protecting his
business.

But it's one thing to gouge fishermen.
For years, Rafael thinks the U .S. can

wait for his tax payments.

But the IRS disagrees.

He's prosecuted for tax evasion by my
office in 1986.

And he was convicted in that case.

Rafael serves four months in prison.

Most people would respond to an
experience like that and say, you know

never going to let that happen to me
again.

But that wasn't Carlos' reaction.

No, it's not.

Rafael's reaction is to continue to draw
the attention of law enforcement.

And it's not long before a second
indictment comes down.

This time, he is charged with price
fixing.

The allegation was he was colluding with
other commercial fishermen in New

Bedford to set prices on certain kinds
of fish.

But he pulls out his charm

and, as he says, played the jury.

His strategy works.

The jury takes his side, and he is
acquitted.

As he walks out of the courtroom, he has
a message for the prosecutors.

That

pretty

well encapsulates his...

feelings about authority.

He is not going to be told what to do by
anybody at any time.

He's his own person, and the rules just
weren't made for him.

Next on American Greed, Raphael's
chilling prediction.

The strong will get stronger than we
will disappear.

In 1994, fishermen up and down the New
England coast receive stunning news.

The fish that have been so plentiful for
hundreds of years are disappearing.

Species like haddock, flounder, and the
mighty cod are in a dangerous state of

decline.

We discovered, wow, we can overfish just
as much as the Russians can.

And, you know, bust followed boom.

To give the fish a chance to rebound,
the National Oceanic and Atmospheric

Administration, NOAA, comes up with a
complicated set of regulations.

This is a national crisis.

At the time, John Bullard is the
regional administrator of NOAA.

And the rules are complex, to say the
least. I mean, our rules are

literally that thick.

The fishermen are furious.

They see not only their livelihood, but
an entire way of life on the brink of

extinction. The new regulations means
you're out of business.

Everyone knows everything.

Everything I've worked for for 35 years
is only a matter of time. We're trying

to survive here.

Think about what kind of a person wants
to go out and brave the elements.

They're fiercely independent people.

They're not the kind of person who says,
oh, hey, regulate me.

I got no money!

And while fishermen with small
operations are yelling, Carlos Rafael

knows he will survive.

And Rafael's mind, the weak are the
hundreds of fishermen

who operate one or two boats.

People like Rodman Sykes.

Sykes is a third -generation fisherman
operating near New Bedford in Point

Judith, Rhode Island.

The only other thing I ever wanted to do
was play second base for the Red Sox,

and that didn't work out, so I became a
fisherman.

Sykes begins his fishing career at the
same time Raphael enters the industry,

the good old days.

Back then, you could do whatever you
wanted to do. I mean, you'd throw the

off and go fishing wherever you wanted,
catch wherever you wanted.

But then he is faced with regulations
that limit the horsepower on his boat

dictate that he use nets with wider mesh
to decrease his catch.

We'd just be going from no restrictions
to that. It was scary.

You know, you're hauling that in and you
see these great big flounders swimming

right through the meshes and swimming
away. We can't possibly do this.

But the most severe restriction for some
fishermen is a limitation on the number

of days a boat can be at sea.

Over time, as the fish don't rebound,
the number of days gets smaller and

smaller.

If someone says, I'm going to reduce the
number of days you can fish,

that hits the family budget. That has
consequences.

The captain says, sorry, guys, we're not
going to be able to provide health

insurance in the nation's most dangerous
job.

And that means that thousands of
fishermen are forced out of the

But Carlos Rafael is thriving.

He has added scallop boats to his fleet,
and they more than make up for the

losses in ground fish.

He was doing quite fine running his
scallopers, no doubt about it, and

millions and millions of dollars.

And as for all those rules and
regulations to protect ground fish,

It appears he simply ignores them.

I don't think that he actively thought
to break them. They just were

to him.

I'm just going to do what I want to do
because I want to do it.

And over time...

Violations stack up.

Exceeded haddock limit.

Fished in closed area.

Exceeded days at sea limit.

Submitted false daily catch reports.

But, as he tells the IRS, he is not
intimidated by government inspectors.

He's incorrigible.

This is his way of life, to break the
law repeatedly and challenge the

federal government to catch him and then
catch him again and then catch him

again.

And the feds do continue to catch him.

In 1999, there is a third indictment for
Rafael.

This time, he is caught lying on an
application for a permit to catch squid.

saying he has a history in the business.

The government followed up on that
paperwork, and they found that these

had never purchased squid from Carlos.

One of the businesses said, I wasn't
even in business at the time that he

allegedly sold me the squid.

Rafael has no defense this time. He
pleads guilty to five counts of false

statements and is sentenced to probation
and six months house arrest.

And when the punishment ends, it's back
to business as usual.

And his fines amount.

$25 ,000 here, $30 ,000 there.

Those monetary penalties probably would
have put the average fisherman out of

business.

But Rafael can afford the fines.

At the time, he says he is worth at
least $10 million.

And that is when the Codfather is born.

He called himself the Codfather.

So he modeled himself over a crime
family.

He wasn't ashamed of being a lawbreaker.

He bragged about it.

And while Raphael continually thumbs his
nose at law enforcement, most other

fishermen make a different painful
choice.

None of us like the regulations, but
they're not just for some people and not

others. And I try to go by them as well
as I know them.

Next, Carlos Rafael gets his big chance
to destroy his competition.

By 2009, Carlos Rafael is running one of
the largest commercial ground fish

businesses in the United States.

He proudly attributes his success to his
hard work.

At this

point, he is a fixture on the new
Bedford waterfront,

often entertaining visitors at a
waterfront festival.

with his tips on cutting and buying
fresh fish.

It appears

that Rafael is doing

exceedingly well, but many of his
competitors are struggling to eke out a

as the fish fail to rebound.

And as more and more fishermen call it
quits, Raphael is there to take their

boat off their hands.

And that makes him a kind of hero in New
Bedford, credited with keeping a dying

industry afloat.

He kept vessels fishing, which employed
four or five fishermen for a boat,

several people on the shore.

There was a big upside to it.

But Rafael repeatedly makes it clear
that he doesn't care about other

At a meeting where a proposal to provide
emergency relief money to suffering

fishermen is discussed, Rafael speaks
up.

Carlos said to hell with them. He says
they're just going to spend it on booze

or drugs anyways.

I mean, that was Carlos' opinion.

There was a young man who said that he
wanted to be able to get into fishing,

and Carlos said...

you know, this guy is never going to get
into fishing. I am going to squash him

like a bug.

Quintessential Carlos.

I'll squash him like a bug.

He would get up at the mic and say, I
don't give a damn about you small

fishermen. I'm going to get it all.

I mean, it was not a veiled state of
mind.

And then in 2010,

A new set of rules is put in place for
ground fish that gives him the edge he

looking for.

For many, the days at sea regulation is
gone.

Now, government scientists will
determine how many fish of each species

caught in a year.

And each fisherman will be given a
percentage of that number, a quota for

many they can catch of each kind of
fish.

And then the boat can pick and choose
when it goes out.

how many days it goes out to catch its
allotment for the year.

It's made to order for Carlos Rafael
because the percentage a fisherman gets

a species like cod, for example, is
based on how many cod a fisherman caught

recent years.

So the people who fished the hardest on
the most stressed fish were given the

biggest percentage of the future quota.

on that fish.

And so Rafael is able to obtain around
50 permits to catch millions of pounds

fish.

These quotas, these permits, were the
lifeblood of commercial fishing after

2010. If you had a lot of permits, you
could do a lot of fishing, you could

a lot of money. If you didn't have a lot
of permits, then you couldn't do a lot

of fishing and make a lot of money.

It sounds simple.

But it is not when it comes to ground
fish.

And that is because ground fish swim
together.

And when the nets go down, different
species get caught together.

So whatever fish is the lowest quota,
once you caught your quota of that fish,

you had to stop fishing.

So if you caught all the yellowtail you
were allowed to catch, you couldn't cast

your nets anymore because you were going
to pull in more yellowtail among

everything else that you caught.

And so you had to stop right there.

And inevitably, some fishermen do not
have enough permits to stay in business.

And once again, Carlos Rafael is there
to buy their boats and their permits,

ostensibly bailing them out, but also
serving his personal ambition.

This may be Rafael's moment to get total
control.

But that does not mean he will stop also
trying to steal.

In October 2013, one of his boats
reports a catch of 1 ,850 pounds of

But a check by Noah of what is really on
board reveals that the boat has 12

,794 pounds over six times what he
reports.

He gets caught again, and Noah finds him
$70 ,000.

Rafael can afford that fine, and so he
is willing to take risks that other

fishermen would not dare take.

I'd be scared to death.

He had a lot of permits, so maybe he
could afford to lose one or two. I got

If I lose that, a boat without permits,
not totally worthless, but not worth

much.

They're trying to follow the rules.

They're trying to eke out a living with
maybe three boats.

Here you have Carlos Rafael with 40
boats.

He's cheating. You know he's cheating.

And he's prospering.

You're not cheating, and you're not
prospering.

And there seems to be just one
conclusion.

He's untouchable. He's the Godfather.

Next,

Raphael lures in co -conspirators.

At a time where some of your compatriots
are starving to death, you'll pretty

much do what the hell you're told.

For years, Carlos Rafael is a thorn in
the side of law enforcement.

He has been prosecuted three times with
two convictions, and he has paid

hundreds of thousands of dollars in
fines for civil violations.

You can cite him for doing this and
that, and for him it's like a parking

ticket.

Something more was needed.

And the chance to do something more
comes in January 2015.

When the IRS agents see an article in
the New Bedford paper saying that

wants to sell his business, he tells the
reporter, I'm going to cash in and

screw.

So I saw that article and thought, if he
wants to sell his business, maybe we're

interested in buying it.

And so IRS undercover agents place a
call to Raphael.

They just picked up the phone and called
him.

and said, we're a bunch of guys from New
York. We're thinking about buying your

business. Would you sit down with us?

Rafael takes the bait and agrees to a
meeting in June.

There are three undercover agents
working the operation.

One is playing the part of a financial
broker.

The other two are his clients, who claim
to be Russian investors.

They meet Rafael at his office.

He wasn't anybody like I ever met
before.

Because the agents work undercover, they
ask that their faces be concealed.

If you give it an opportunity, he'll
talk about himself constantly.

Larger than life. Very in your face.

Lots of vulgarity, swearing, yelling,
screaming.

I didn't realize that the F word could
be used in so many ways in a sentence,

be quite frank.

The Russians first questioned to
Raphael, what does he want for his

His answer, $175 million.

And they said to him, well, we'd have to
see your books.

So when Carlos showed them his
legitimate books, it did not support

So they said to him, why would we pay
you $175 million for this business?

And to answer that question, he needs to
reveal his scheme, how he gets around

the law and keeps his profits high.

So

that

is his secret.

It's called lies.

This is what he does.

If a captain catches 3 ,000 pounds of
cod, which is a fish for which Rafael

a low allotment, he calls the cod
something else, like haddock, a fish for

he has a huge allotment.

It's just a simple matter of falsifying
official reports that are sent to NOAA.

Rafael tells the boat captains how to
lie about what they catch.

He lies about what he buys.

So back at NOAA, when they compare the
two, they don't detect any fraud because

they match.

And so Rafael can catch whatever he
wants and not be limited by his quota,

the government allows him to catch.

When law -abiding fishermen reach the
end of their allowable share of the

catch... they are forced to stop
fishing, or they have the option to buy

quota.

They gave me, I think, 6 ,000 pounds of
winter flounder for the whole year,

which starts May 1st.

So I've already used that up.

So in order to stay in business, I have
to lease the rights to catch

more flounder from another fisherman.

Honest fishermen like Rodman Sykes are
forced to pay for the right to catch

fish.

Because he is lying to the government,
Carlos Rafael does not have that

And Rafael claims...

His captains profit from the scheme as
well, because he requires them to chip

on any quota that he is forced to buy.

The captain knows, and the captain is
the one that loves to do that, because

doesn't want to go buy that quota. So
every time I do the charade, they're

making money.

And later, when the scheme is
discovered...

Some people on the waterfront understand
a captain's choice.

I can tell you one thing.

If you're a captain of a fairly good
vessel that's making fairly good

money at a time where some of your
compatriots are starving to death or

out of business or losing their homes,
you'll pretty much do what the hell

you're told.

And I don't want people to think that,
you know, that I approved of it.

But I think I understand it.

By January 2016, the IRS agents know
they need to get more proof of Rafael's

scheme.

And at their last meeting, he provides
it all.

He pulled out trip reports. He pulled
out bills of lading and dealer reports.

All the documents that identify what was
being caught, which boat was landing

it. And to whom it was being sold.

It's as if he is showing off a great
achievement.

He is proud of his scheme.

I've seen it all.

And I've done it all.

That's the other thing.

I've done it all. I wrote the book.

Next on American Greed, Rafael tries tax
evasion again.

The bags of cash were so heavy that
sometimes they would struggle to

carry them.

Hear how Carlos Rafael talks to his
customers at AmericanGreed .CNBC .com.

Want inside information from the show?

Join the Greed social network.

Like us on American Greed's Facebook
page.

We'll be right back.

Anyone seeing Carlos Rafael on the New
Bedford waterfront would not suspect

the man is worth millions of dollars.

He drives an old pickup truck.

His house is a modest home in nearby
Dartmouth that he bought in 1980.

And while he typically keeps the details
of his finances close to his chest, in

2016, he is forced to open his books to
two Russians.

who say they want to buy his business.

It

is

a receipt of sorts for $600

,000, money that he says he receives
from a wholesale fish dealer in New York

City.

The dealer is not in on Rafael's fraud.
He simply buys his fish from Rafael at a

discount because he pays with cash and
delivered to Rafael.

He would meet Carlos halfway between New
York and Boston and give him a duffel

bag with cash in it for the fish.

The bags of cash were so heavy that
sometimes they would struggle to

carry them.

And the bags of cash are deliberately
kept out of sight.

So for Carlos, those cash payments never
made it on his books.

So that became unreported income.

And that's something of interest to the
IRS agency he's talking to.

They ask, what happens to the cash?

Carlos said, I got it overseas.

Well, wait, wait.

If you have it overseas, you have to
fill out paperwork and stuff, right? The

currency report that you fill out at an
airport any time you take more than $10

,000. What do you mean you're bringing
it out of the country?

Rafael says he has a friend with special
credentials.

That agent he is talking about is a
local law enforcement officer breaking

law and getting cash past security at
Boston's Logan Airport.

It was a very big moment for us.

You have to understand, that's where 9
-11 started.

And now we're hearing about a law
enforcement officer circumventing

security at that same airport. So we,
right away, were very alarmed, very

worried.

The officer is Bristol County Sheriff's
Deputy Antonio Freitas.

Rafael says Freitas owes him.

I got him the job. I got him his raises.
Shortly

after Rafael makes that claim,

Freitas is caught smuggling cash for his
friend, Carlos Rafael.

So Freitas was ultimately indicted for
conspiracy and bulk cash smuggling.

So he was tried and convicted.

He is sentenced to a year in prison.

The IRS undercover operation ends in
January 2016.

The government feels it has what it
needs to move forward.

As the agents say goodbye to Rafael, he
thinks he has sold his business to a

couple of Russian mobsters.

After all, he is untouchable.

He would brag to us over and over again
how no one was ever going to catch him

and how everyone had been trying to
catch him for years and years and years.

And, you know, he knew that he was
tricking everybody.

And meanwhile, at that time, he was the
one getting tricked.

Next.

The danger of goading the federal
government.

Carlos Rafael was quoted in the press as
saying, I'm a pirate, it's your job to

catch me.

For years, Carlos Rafael runs a criminal
operation believing he will never be

caught. He confidently tells the
undercover agents...

But on February 26, 2016, more than a
dozen federal law enforcement officers

surround Carlos Seafood and move inside
to arrest Rafael.

Carlos Rafael was quoted in the press as
saying, I'm a pirate. It's your job to

catch me.

I love that because that's perfect.

We caught him.

After the raid on Rafael's business with
hundreds of his records seized, federal

investigators begin the work of sorting
out his lies.

Fish by fish, boat by boat, sail by
sail, thousands of transactions.

In the end, the government comes up with
a figure.

In four years, Rafael illegally caught
at least 782 ,000 pounds

of fish.

My first question was, is that a lot of
fish?

So we asked an analyst at NOAA, and the
analyst said, if forests were your

thing, this would be like burning down
Vermont.

We said, okay, it's a lot of fish.

And it's important to remember whose
fish those are.

You know, this is really a crime against
all of us, because these fish didn't

belong to Carlos.

He didn't spend a dime raising them. He
didn't feed them. He just went out and

took them.

And he took them illegally.

And he took them not just from his
fellow fishermen. He took them from us.

In March 2017, faced with 15 hours of
undercover recordings made by the IRS

agents, Rafael pleads guilty to
conspiracy, falsifying federal records,

cash smuggling.

and tax evasion.

Through his attorney, he declines
American Greed's request to participate

this report.

At his sentencing hearing, Rafael argues
that in perpetrating his scheme, he was

actually trying to help fishermen in New
Bedford.

He wanted to keep them working.

He asks for 24 months of community
confinement, claiming that his crime was

stupid, not greedy.

The judge disagrees, saying this was not
stupid, this was corrupt.

He sentences Rafael to 46 months in
prison.

I think he was convinced to give Carlos
Rafael a high sentence by the sheer

extent of the misconduct in this case
and the fact that he had been prosecuted

three times in the past for crimes
related to his fishing business.

So I think we were able to convince the
court.

that unless federal law enforcement was
going to be a complete joke, it had to

be the last time.

Rafael is in federal prison, but there
is a worry on New England waterfronts

that his crimes have hurt the reputation
of all fishermen here who essentially

operate in an honor system.

Carlos didn't care about the honor
system. In fact, he used it.

to his advantage, and really, in the
process, dishonored every other law

-abiding fisherman out on the water.

And those law -abiding fishermen believe
that is unfair.

They have a message for anyone who hears
the story of Carlos Rafael.

I want them to know that the vast
majority of fishermen in this port, in

Bedford, all up and down the East Coast,
are...

Honest, hard -working guys. Very hard
-working guys.

And while some want to blame the system
itself for Rafael's crimes, others are

clear. There is just one person to
blame, Carlos Rafael.

He's the person who broke the law.

That's where the blame needs to be, with
this person

who's not a fisherman. He's a crook.

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