NORFOLK, VIRGINIA— Today, legal representatives of Lumber Liquidators Inc. appeared in the Eastern District Court of Virginia to plead guilty to four misdemeanor counts for violations of the Lacey Act and one felony count of entry of goods by means of false statement. The judge presiding in the case accepted the guilty plea, and confirmed with both government and company representatives the facts in the plea agreement.
Lumber Liquidators charged with $13 million in fines
The plea agreement, released October 7, states that Lumber Liquidators Inc. agreed to pay more than $13 million in fines and be placed on a five-year probationary period while it implements a Lacey Act Compliance Plan. The plea agreement notes that the facts it contains “do not represent the entirety of the government’s evidence against the defendant.” A sentencing hearing is scheduled to take place on February 1, 2016.
“This case marks a critical turning point in efforts to transform the global timber supply chain, showing unequivocally the United States will no longer traffic in stolen goods,” said Kate Horner, Director of Forest Campaigns for the DC-based Environmental Investigation Agency. “Lumber Liquidators will not only pay for its past misdeeds with a hefty fine, the company will be forced to fundamentally transform their business model and sourcing practices to forgo cheap, illegal products that decimate the forests of the world as its implements a mandatory new, rigorous compliance plan.”
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The DOJ initiated a federal investigation of the Lumber Liquidators’ wood sourcing practices in September 2013. In October 2013, the Environmental Investigation Agency’s (EIA) investigative report, Liquidating the Forests, revealed that the company had sourced illegal timber from the Russian Far East through its Chinese suppliers, ultimately selling it to unwitting consumers across the United States. Although Lumber Liquidators spokespeople denied any wrongdoing for the past two years, evidence made public in EIA’s investigative report, which showed serious illegalities in Lumber Liquidators hardwood flooring supply chains, was confirmed in the plea agreement. The DOJ also confirmed the findings of EIA investigators that Lumber Liquidators must have had knowledge of illegal practices such as overharvesting and falsified declarations at the time they increased their purchases from the respective Chinese suppliers.
Lumber Liquidators is the largest hardwood flooring retailer in the United States. The company’s plea agreement marks the first time a major corporation has been found guilty of violations of the US Lacey Act, which was amended in 2008 to include a prohibition on trade in illegally sourced and traded plant products.