Union-owned lobster co-op files federal racketeering suit against former CEO

BANGOR — Warren B. Pettegrow, former chief executive officer of Lobster 207, a marketing cooperative owned by members of the Maine Lobstering Union, is one of four individual and two corporate defendants named in a civil racketeering complaint filed Wednesday, Dec. 4, on behalf of the union-owned co-op in the U.S. District Court in Bangor.

Lobster 207, LLC, a Trenton lobster wholesale co-op owned by the members of the Maine Lobstering Union (MLU), has filed a civil action against:

• Former CEO Warren B. Pettegrow of Trenton.

• His company, Poseidon Charters Inc.

• Anthony D. and Josette G. Pettegrow of Trenton and their company, Trenton Bridge Lobster Pound Inc.

• Stephen M. Peabody of Addison, the manager of the Beals-Jonesport Co-op in Jonesport.

The complaint alleges violation of the federal Racketeer Influenced and Corrupt Organizations (RICO) Act involving the theft and embezzlement of funds of a labor organization and wire fraud, as well as common law fraud, breaches of contracts, conversion, breaches of fiduciary duty and unjust enrichment.

The American was unable to immediately reach Pettegrow by telephone Thursday afternoon for comment.

On Thursday afternoon, Peabody said he had “just heard” about the lawsuit and had not read the complaint, but he denied any improper conduct.

“I haven’t done anything wrong,” he said. “I just work for the lobstermen and make them all the money I can. I have nothing to hide.”

The suit alleges that the defendants engaged in a systematic scheme and pattern of racketeering activity designed to enrich themselves at Lobster 207’s expense.

In a motion for attachment filed simultaneously with its complaint, the lobstering union co-op asked the court to place a $1.94-million lien on property owned by the defendants.

According to the complaint, the Maine Lobstering Union purchased the wholesale operations of the Trenton Bridge Lobster Pound from Anthony and Josette Pettegrow in 2017. As part of the transaction, Warren Pettegrow was named as CEO of Lobster 207 and the Pettegrows entered into contracts to withdraw from the wholesale lobster business and not compete with the co-op’s wholesale lobster operations.

The RICO allegations in the complaint charge that between March 2017 and April 2019, the defendants formed an unlawful enterprise through which they embezzled funds, submitted fraudulent invoices, up-charged for lobster products and competed with the wholesale lobster business that they had sold to Lobster 207.

Warren Pettegrow was terminated for cause as Lobster 207’s CEO in April 2019.

“This complaint alleges numerous schemes involving embezzlement and fraud under both the federal RICO act and Maine law,” said Thimi Mina, a Portland attorney who represents Lobster 207. “The amount of money allegedly involved in these schemes caused significant financial injuries to Lobster 207.”

The civil RICO allegations, if proved, allow the recovery of treble damages, triple the amount of actual compensatory damages.

Stephen Rappaport

Stephen Rappaport

Waterfront Editor at The Ellsworth American
Stephen Rappaport has lived in Maine for nearly 30 years. A lifelong sailor, he spends as much time as possible messing about in boats. [email protected]