Lumber Liquidators Settles With Department Of Justice For $10 Million

Lumber Liquidators, one of the largest hardwood flooring retailers in the United States, is going to pay millions of dollars. The $10 million that Lumber Liquidators will pay will settle criminal charges with the U.S. Department of Justice in regards to some of the company’s wood flooring, according to CNN.

In addition to paying the $10 million, Lumber Liquidators is going to plead guilty to violating the Lacey Act. The act that Lumber Liquidators violated is a conversation law regarding the protection of fish and wildlife, as well as plants. Lumber Liquidators will plead guilty in violation of the act for making false declarations about where the timber used in its hardwood flooring originated from.

John Presley, the chairman of the board of directors of Lumber Liquidators, said that Lumber Liquidators was happy to reach an agreement with the government and was pleased to resolve the issue relating to the Lacey Act. Presley added that they would continue to focus on strengthening Lumber Liquidators across every single area of the organization.

Lumber Liquidators said it will pay $350,000 to the National Fish and Wildlife Foundation and the Rhinoceros and Tiger Conservation Fund. Asides from that, Lumber Liquidators will pay a fine of $7.8 million, as well as an $880,825 community service payment. Lumber Liquidators will also forfeit $969,175. However, the company didn’t say who would be receiving the forfeiture payment.

Even though a settlement has been reached, payments won’t be made right away. When Lumber Liquidators makes any payments, the court will need to approve of the settlement, which will end up being paid over the course of two years, and in phases.

It was in 2013 when the U.S. Department of Justice inquired about Lumber Liquidators using illegally imported timber from eastern Russia, according to Business Insider.

According to CNBC, the wood that Lumber Liquidators was using came from parts of Russia where wild Siberian tigers live. Illegal logging in Eastern Russia actually threatens the animals’ habitat. Aside from getting wood from Russia Lumber Liquidators was also getting wood from parts of Myanmar.

Also, earlier this year, a report from 60 Minutes found that Lumber Liquidators was selling laminate flooring from China, but the flooring had levels of formaldehyde that were higher than what California law allows. There are a number of health concerns that surround high levels of formaldehyde.

Lumber Liquidators did say that they (60 Minutes) got it wrong and that they used a testing method that was improper. However, this recent settlement is not related to the allegations that Lumber Liquidators was selling flooring with high levels of formaldehyde.

After the report came out, shares of Lumber Liquidators ended up dropping by more than 70 percent and some of the top executives at Lumber Liquidators decided to leave the company. This included CFO Daniel Terrell, as well as CEO Robert Lynch.

In response to the report, Lumber Liquidators said that it stood behind every single plank of wood and laminate that they sell around the United States. Lumber Liquidators also said that it had plans to continue to deliver the best products at the best prices to their customers.

Lumber Liquidators said that after they became aware of the 60 Minutes story, they decided to contact the Chinese suppliers that were named in the story. The company said that the suppliers told them that the products they were providing Lumber Liquidators were and are CARB (California Air Resources Board) compliant. As of now, CARB is the only regulator of composite core emissions.

At the time Lumber Liquidators addressed the report, one supplier did question whether or not the product that was shown in the report was actually from its own factory.

[Image via Scott Olson/Getty Images]