HALLOWELL –– Patrick Keliher, commissioner of the state Department of Marine Resources, sits at the head of a conference table in his office in Hallowell, flanked by three marine resources officers and an assistant attorney general.

Across the table sits Sean Manning, an elver fisherman from Sullivan with red eyes, a runny nose and a devastated expression.

Keliher slides a box of tissues in Manning’s direction and asks him if he wants to say anything before the state revokes his elver fishing license.

“I don’t think the whole thing is fair at all,” Manning says, shaking his head.

“This is not targeted only at you,” Keliher says softly. “We have ongoing investigations.”

Those ongoing investigations into Maine’s lucrative yet fragile elver fishery are now coming into public view. Manning is one of five fishermen who have lost their licenses this year because the state has determined that they under-reported landings in 2013 – it says Manning reported only a third of the baby eels he netted.

Nine other fishermen have received notices of suspension and face hearings.

The number of license suspensions for fishermen in 2013? Zero.

The flurry of suspensions highlights the state’s effort to steer the multimillion-dollar elver industry from the brink of closure. For the first time, state officials and marine resources officers are scrutinizing catch records, dealers’ reports and tax returns, and penalizing fishermen for violations committed one and two years ago.

State officials say the investigations are part of a larger crackdown that’s needed to show federal regulators that Maine can oversee an industry that until recently was a lightly regulated cash business. They also hope that the publicized effort will deter illegal activity that may elude new regulations.

“We’re absolutely under the microscope,” said Jeff Nichols, a spokesman for the Department of Marine Resources. “We have to demonstrate our ability to develop and enforce our conservation laws or we could lose this fishery.”

The crackdown has snared fishermen who once operated within loosely defined rules. While the state has adopted new measures to get more accurate catch figures, many of the suspensions stem from investigations of older records, which some fear could have been manipulated by dealers who bought and sold illegally caught eels.

INDUSTRY IN TRANSITION, IN PERIL

Maine’s 2011, 2012 and 2013 elver seasons were the zenith of a fishery that is now second in value to lobster.

A spike in market prices to nearly $2,000 per pound coincided with the shutdown of eel exports from Europe to Asian countries, where the baby eels are raised on farms to be eaten later.

Maine and South Carolina, the only states that allow commercial sales of elvers, benefited from the increased demand. The number of license holders soared with the prices, as did the need for Maine’s 50 marine resources wardens to police the state’s rivers.

With the gold rush came jockeying for prime fishing spots, heavily armed men guarding piles of cash and, later, scrutiny of the fishery.

State officials realized that Maine needed tighter regulations to guard against poaching and underreported landings. Meanwhile, federal regulators and conservationists worried that the increased fishing would decimate the eel population and close the fishery. State officials scrambled to install rules and a new catch tracking system.

Under pressure from federal regulators, the state agreed to reduce its total catch by 35 percent this year. It also created a swipe-card system to monitor the catch, and moved from a derby-style statewide quota to individual quotas for fishermen. Stiffer penalties were adopted for illegal harvesting and underreporting the catch.

Behind the scenes, state officials hatched new plans for enforcement. The state initiated the Elver Project, a multi-agency effort discovered by the Portland Press Herald in documents obtained through a Freedom of Access Act request. The Elver Project involves reviews of catch records and tax filings from 2010 to 2013, to determine if any elver fishermen received welfare benefits or underreported or failed to report earnings.

On April 1, six days before the start of the 2014 season, the Elver Project appeared to ensnare its first violator. The Attorney General’s Office and the Department of Marine Resources announced the prosecution of Danny Deraps, 43, of Ellsworth, who pleaded guilty to income tax evasion and theft for reporting half of his $700,000 in earnings from the baby eels in 2012.

“Our ability to manage and sustain Maine’s marine resources relies heavily on accurate reporting of harvester landings data,” Keliher said in a written statement at the time. “We take this very seriously and will continue to be vigilant in our efforts to ensure compliance.”

NEW AUTHORITY FOR WARDENS

The spate of license suspensions is unprecedented in the elver industry. Marine resources wardens could not review catch records until the state Legislature gave them the authority last year. The change came at the urging of the DMR, which had discovered a 5,000-pound discrepancy between aggregate fishermen’s landings and dealers’ records from the 2012 season.

In 2013, the discrepancy was 3,700 pounds – about 31 percent of the quota for the 2014 season.

Col. Joseph Fessenden, chief of the Maine Marine Patrol, said lifting the confidentiality of the records was critical to maintaining the fishery.

“How can we manage a fishery if we can’t determine what’s coming out of the resource?” he said. “This isn’t a witch hunt or anything like that. This is simply us making sure that we know what’s being caught. We couldn’t do that without access to that landings data.”

The crackdown has caught elver fishermen like Manning off guard. Some have questioned the fairness of the process, which gives broad authority to marine resources officers to review data and consider evidence.

The administrative suspensions are civil penalties. Final action is decided by Keliher, who has the authority to reduce suspensions that can be as long as a year for a first offense, two years for a second offense and three years for a third.

Some fishermen have questioned whether the dealer data that the state is matching against fishermen’s catch reports is legitimate.

William Welte, a maritime attorney representing Manning, argued during Thursday’s hearing that a dealer could cause discrepancies by buying elvers from a poacher but recording them as coming from a licensed fishermen.

Dealers and fishermen have said that the only way for dealers to fetch market prices for poached eels is to make the sales appear legitimate.

Manning made that argument to Keliher, saying poachers stole his nets and dealers sold the illegal eels under his license. “They are not honest people,” Manning said. “Why weren’t we protected?”

Fessenden told the Press Herald that he has heard such a defense several times this year. In each case, a review of the dealer’s records showed that the fisherman’s records had been manipulated.

Fishermen’s catch records are shielded from the public, which can review only aggregate data. The same applies to dealers’ records.

Fessenden was confident that officers had the facts straight in Manning’s case.

“Nothing that he brought to us was going to change his suspension,” Fessenden said. He said Manning under-reported his catch by more than two-thirds, based on the dealer records.

A LICENSE SUSPENDED, MORE TO COME

As Manning’s hearing draws to a close, he says he doesn’t know what he’s going to do. “I’ve been working since I was 7 years old,” he says.

Keliher shuts off the recorder, stands up and asks Manning to turn over his license.

Manning slowly digs through his wallet, passing by the licenses he holds to harvest sea urchins and worms.

“I don’t want to give you the wrong one,” he says.

Jeffrey Pierce, executive director of the 197-member Maine Elver Fishermen Association, said in January that many elver fishermen try to scratch out a living by working in several fisheries. Some have entered the fishery recently, Pierce said, but many others have been working in it since baby eels fetched just $25 a pound.

The spike in prices has brought many fishermen more income than they’ve ever seen. Many don’t know how to manage it, Pierce said, noting that the association brought in a tax expert recently to explain to members how to file a tax return properly.

Fessenden said he hopes the crackdown will lead to increased awareness, fewer infractions and an open fishery.

“We hope this is a wakeup call to people to pay more attention and to follow the law,” he said.

Steve Mistler can be contacted at 791-6345 or at:

smistler@pressherald.com

Twitter: @stevemistler