Lumber Liquidators, one of the largest specialty retailers of wood flooring in America, was sentenced Monday for illegally importing hardwood and other related environmental crimes.
The company will pay more than $13 million in fines and restitution.
The company pleaded guilty to both felony and misdemeanor charges back in October 2015.
"We are just happy to put it behind us," said Lumber Liquidators Chief Compliance Officer, Jill Witter. "We are moving forward, we got lots of wood to sell and we are hoping our customers will come back."
Under the 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. Lumber Liquidators also agreed to a five year term of organizational probation and mandatory implementation of a government-approved environmental compliance plan and independent audits. In addition, the company will pay more than $3.15 million in cash through a related civil forfeiture.
“Lumber Liquidators’ race to profit resulted in the plundering of forests and wildlife habitat that, if continued, could spell the end of the Siberian tiger,” said Assistant Attorney General John C. Cruden for the Justice Department’s Environment and Natural Resources Division.
Most of the company’s profits came from importing wood from mills and manufacturers outside of the country.
Many of their suppliers are in China where illegal flooring was manufactured.
The timber that was used was harvested in other countries and then shipped to China, some of it came from Far East Russia and Mynamar.
The timber harvested in Russia had a high risk of being illegally sourced due to corruption and illegal harvesting.
It’s illegal to cut Mongolian oak in the temperate broadleaf forests because these areas are home to the last wild Siberian tigers. There are fewer than 450 of these tigers left.
The acorns on the Mongolian Oak trees are a source of food for the tigers’ prey including red deer, roe deer, and wild boar.
Any company that imports these items must file documents with the U.S. Customs and Border Protection describing what they are importing and the item’s origin.
Federal officials say from February 1, 2013-August 30, 2013, Lumber Liquidators filled out documents stating that 385.48 cubic meters of oak flooring procured through 12 separate shipments from a supplier in China was Mongolian oak harvested in Germany. Officials say these statements were false.
The company is also being charged for transporting the illegally imported timber from its warehouses in Toano to customers online, retail stores in Virginia and other states.
Back in May 2015, the company's CEO resigned. At that time the company’s shares were down about 15%.
The company faced earlier allegations that the wood contained toxic chemicals and discontinued sales of laminate flooring from China. Over 100 class action lawsuits were filed against the company.
"Lumber Liquidators knew their legal duties and they did not comply with those legal duties despite numerous red flags and internal warnings," says Patrick Duggan with the United States Department of Justice. "Their failure to comply resulted in illegal timber that came from some of the world's most sensitive areas."
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- Lumber Liquidators halts sales of Chinese flooring
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- Federal warrant served at Lumber Liquidators headquarters in Toano