Lumber Liquidators Pleads Guilty in Federal Wood Import Case - Global Trade Magazine
  October 28th, 2015 | Written by

Lumber Liquidators Pleads Guilty in Federal Wood Import Case

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  • Lumber Liquidators “failed to follow its own internal procedures and to take action on self-identified red flags.”
  • Lumber Liquidators imported from high-risk countries and from suppliers who lacked documentation.
  • Under a plea agreement, Lumber Liquidators will pay $13.15 million, including $7.8 million in criminal fines.

The Virginia-based hardwood flooring importer and retailer Lumber Liquidators Inc. has pleaded guilty in federal court to “environmental crimes related to its illegal importation of hardwood flooring,” according to the United States Department of Justice (DOJ).

Lumber Liquidators was charged earlier this month in the U.S. District Court for the Eastern District of Virginia with one felony count of importing goods through false statements and four misdemeanor violations of the Lacey Act, which makes it a crime to import timber that was taken in violation of the laws of a foreign country and to transport falsely-labeled timber across international borders into the U.S.

According to a joint statement of facts filed with the court, from 2010 to 2013, Lumber Liquidators “repeatedly failed to follow its own internal procedures and failed to take action on self-identified red flags,” that included “imports from high risk countries, imports of high risk species, imports from suppliers who were unable to provide documentation of legal harvest and imports from suppliers who provided false information about their products.”

Lumber Liquidators, it said, “falsely reported the species or harvest country of timber when it was imported into the United States.”

In 2013, the company, the DOJ charged, imported timber from the Russian Far East that was logged under a concession permit “that had been utilized so many times that the defendants’ imports alone exceeded the legal harvest allowance of Mongolian oak by more than 800 percent,” and imported merpauh from Myanmar which it declared to be mahogany from Indonesia.

Corruption and criminal activity along the supply chain results in the same permit being used multiple times and in areas outside of the designated logging area, sometimes vastly exceeding its legal limits,” the DOJ said.

Also covered in the decision was flooring imported by Lumber Liquidators that was “manufactured in China from timber that had been illegally logged in far eastern Russia, in the habitat of the last remaining Siberian tigers and Amur leopards in the world,” the DOJ said.

The court decision is the first felony conviction related to the import or use of illegal timber and the largest criminal fine ever under the Lacey Act.

Under a plea agreement, Lumber Liquidators will pay $13.15 million, including $7.8 million in criminal fines, $969,175 in criminal forfeiture and more than $1.23 million in community service payments.

The company has also agreed to a five year term of “organizational probation and mandatory implementation of a government-approved environmental compliance plan and independent audits,” the DOJ said.  In addition, it will pay more than $3.15 million in cash through a related civil forfeiture.