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Federal agencies are still investigating formaldehyde in Lumber Liquidators’ Chinese-made laminate flooring, which brought a firestorm of federal scrutiny and class-action lawsuits this year – but the company settled a 2013 case this month.
In 2013, special agents from the Immigration and Customs Enforcement’s Homeland Security Investigations unit, together with the U.S. Fish and Wildlife Service and the Justice Department, raided the Lumber Liquidators’ Toano, Virginia, headquarters and another location.
The company was charged with violating the federal Lacey Act, which prohibits importing illegally taken wildlife and plants, and U.S. customs law.
The flooring discounter pleaded guilty to multiple criminal charges and agreed to pay $10 million in fines and other costs, such as financial contributions to the National Fish and Wildlife Foundation and the Rhinoceros and Tiger Conservation fund.
“These violations, including the Class E felony, do not require the Company to have acted with a deliberate or willful intent to violate the law, and the Company did not stipulate that it acted with such a deliberate or willful intent,” Lumber Liquidators reports.
The federal agencies investigated whether the company bought and imported wood from “foreign suppliers harvesting more timber than their permits allowed in foreign jurisdictions, such as Eastern Russia,” according to a document filed with the U.S. Securities and Exchange Commission this month.
Lumber Liquidators “concealed that it imported timber from a habitat for rare tigers, U.S. prosecutors said as the company announced it will pay $13.2 million to resolve a federal investigation,” according to Bloomberg.
A $3.2 million payment, which is in addition to the $10 million, goes to the Department of Justice so the company doesn’t have to forfeit lumber that was under investigation, Lumber Liquidators’ SEC filing says.
Separate accusations came out this year after CBS reported March 1 that the company sold laminate flooring with higher levels of formaldehyde than permitted by California’s health and safety standards. A multi-agency federal investigation of the company is still underway.
