Lumber Liquidators was fined US$13 million in criminal fines, community service and forfeited assets last week. The U.S. hardwood flooring retailer was sentenced because they had illegally imported hardwood flooring. Moreover, the hardwood was manufactured in China and the timber used for it had been illegally logged from Russia, where the last remaining Siberian tigers and Amur leopards in the world are living.
In addition, the hardwood flooring retailer is on a five-year term of organizational probation and mandatory implementation of an environmental compliance plan approved by the government.
As the U.S. Department of Justice (DoJ) announced, Lumber Liquidators will have to pay $13.15 million, from which $7.8 million represent criminal fines, $969,175 for criminal forfeiture and more than $1.23 million for community service payments. This is the biggest financial penalty for timber trafficking under the Lacey Act and one of the biggest penalties that the Lacey Act has given by now.
Lumber Liquidators acknowledged the illegality and they were charged in October 2015 in the Eastern District of Virginia. The company had one felony count based on the import of goods through false statements and also four misdemeanor violations of the Lacey Act.
The Lacey Act forbids the trade in wildlife, fish or plants that are illegally obtained, transported or sold.
As DoJ explained, this is the first felony conviction related to the import or use of illegal timber.
Still, Lumber Liquidators was involved in other controversies regarding the Lacey Act law. Back in 2013, the EIA investigators posed as timber buyers and exposed the illegal wood trade in the Russian Far East, finding that Chinese company Xingjia had admitted to illegal logging and paying bribes. Lumber Liquidators was their biggest trade partner. The officials of the Chinese company said, at that time, that the flooring retailer knew about the provenience of the wood.
CEO Robert Lynch and CFO Daniel Terrell resigned after these dissensions. Lumber Liquidators has approximately 370 locations and is the biggest specialty retailer of hardwood flooring in North America.