updated 11/30/2004 8:17:19 AM ET 2004-11-30T13:17:19

Federal regulators on Monday fined Icicle Seafoods Inc. and two other companies $3.44 million, saying the companies worked as one to corner the Adak crab market, processing millions of pounds above their limit over the past two years.

The fine is one of the largest civil penalties assessed by the Commerce Department's National Oceanic and Atmospheric Administration, administration officials said.

NOAA's Office for Law Enforcement investigators said Adak Fisheries and Adak Fisheries Development operated as one company under the administration of Icicle Seafoods in processing and marketing the brown king crabs caught between January 2002 and February 2004 in the remote island in the Aleutian chain.

Icicle Seafoods president and chief executive Don Giles said the company had cooperated with the investigation throughout but disagreed with the findings.

The Notice of Violation and Assessment says Seattle-based Icicle Seafoods was a partner in Adak Fisheries, the only fish processor on Adak. Adak Fisheries leased space in its plant to Adak Fisheries Development, the island's sole crab processor. Adak Fisheries Development is separately incorporated but owned by Adak Fisheries, according to NOAA. Both companies used the same employees and management, investigators said.

Under the American Fisheries Act, if once company controls more than 10 percent of another, they are considered the same company and are capped as one company. Icicle Seafood's cap was just under 222,000 pounds for the two years, but the combined companies processed 3.8 million pounds above that limit, according to NOAA.

The company can pay the fine, ask for an extension, negotiate a settlement or request a hearing.

Copyright 2004 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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