Lumber Liquidators announced a settlement with the Environment and Natural Resources Division of the Department of Justice (“DOJ”) related to the Company’s compliance with the Lacey Act. Source: PR Wire
This concludes the DOJ’s inquiry launched in 2013, which primarily related to certain suppliers harvesting more timber than their permits allowed in foreign jurisdictions, such Eastern Russia, and the company’s importation of flooring products made from this timber.
This matter focused on some of the company’s hardwood flooring purchase orders and declarations made concerning the origin of the timber of those orders.
Lumber Liquidators cooperated with federal authorities and is continuing to make significant enhancements to its sourcing and compliance practices.
This settlement is unrelated to current California Air Resources Board (“CARB”) related claims around certain Lumber Liquidators products.
As part of the settlement, Lumber Liquidators has agreed to plead guilty to violations of Customs law and the Lacey Act, and pay a combined total of $US10.0 million in fines, community service payments and forfeited proceeds.
The payments include a $US7.8 million fine, community service contributions of $US880,825 and $US350,000 to the Fish and Wildlife Foundation and the Rhinoceros and Tiger Conservation fund, respectively, and a$US969,175 forfeiture payment.
Lumber Liquidators also has agreed to implement an Environmental Compliance ensure future compliance with the Lacey Act.
In addition, as previously disclosed, the Company determined in the second quarter of there were Lacey Act compliance concerns related to a limited amount of its engineered hardwood flooring.
As a result, the Company suspended sales of approximately $US4.1 of this product pending further investigation, and brought this matter to the attention DOJ.
During its investigation, the company determined that there were no compliance with respect to approximately $US0.9 million of the suspended engineered hardwood.
As part of the agreement with the DOJ, the company also reached a settlement with the DOJ related to the remaining $US3.2 million of suspended engineered hardwood flooring.
In the settlement, the DOJ will accept a $US3.2 million payment in civil forfeiture of this product, and the company will be permitted to sell the suspended engineered hardwood flooring and retain any proceeds of the sale.
