"Restigouche" was paid off on 31 August 1994. In November 2000, she, along with sister ship , was towed to Mexico for use as an artificial reef. The acquisition of "Restigouche" and "Kootenay" for use as artificial reefs became a source of controversy in Mexico. "Restigouche" and "Kootenay" were purchased by businessmen Carlos Estrabeau and Josefat Cortés, for $160,000 from the Artificial Reef Society of British Columbia (ARSBC) after the two men were inspired by ARSBC's work with other former Canadian ships off the coast of British Columbia. Supported by their government, controversy arose after an investigation by the Acapulco-based newspaper "La Jornada El Sur" found that $100,000 of the total amount paid for the destroyer escorts had come from a government anti-poverty fund. Dubbed "Reefgate", it was later found that the owners did not have the permits to create an artificial reef and were fined by the government. The former destroyer escort was sunk off Acapulco on 11 June 2001. The ship was towed into Acapulco Bay and scuttled in of water by the government who feared that the derelict ship would become a navigational hazard during the hurricane season.