Earlier today in Norfolk, Virginia, U.S. District Judge Raymond Jackson sentenced Lumber Liquidators to five years of probation and more than $13 million in penalties for smuggling illegal wood products into the United States. This agreement, reached by the company and federal prosecutors, represents the largest fine ever issued under the Lacey Act, a landmark environmental law banning the import of illegally sourced timber.
Today's sentence marks the end of a multi-year investigation in which the Department of Justice found that Lumber Liquidators imported products made of wood harvested illegally in Russia, including timber cut from Siberian tiger habitat. For years, Lumber Liquidators relied on shoddy reporting to pass off its illegal products. In one instance the company stated a shipment of Mongolian oak flooring was harvested in Germany, even though Mongolian oak doesn't even grow in that country. In another, the company declared that 79 shipments of oak flooring, worth nearly $8 million, were all logged from the same permitted area in Russia. Unfortunately for the company, the amount of wood in those shipments was 800 percent of the allowed harvest under that permit.
Going forward, Lumber Liquidators must pay more than $13 million in fines and establish an environmental compliance plan in which all of its products must be traced back to the source of harvesting. Further, over its five-year probation, the company will be subject to independent audits of its sourcing practices. Although Lumber Liquidators can afford more than $10 million in fines, the real cost will come when they can no longer rely on cheap, illegal wood to reduce prices.
By holding Lumber Liquidators accountable for smuggling illegal timber, the United States is showing that it is serious about enforcing the Lacey Act and fighting illegal logging. Indeed, this case should serve as a warning to other companies that they must ensure their products are sourced legally, instead of profiting from cheap, illegal timber. Strong environmental laws only work if they are enforced - please take a minute to thank the Obama administration for enforcing the Lacey Act.