The Department of Justice sentenced Lumber Liquidators this week per the settlement agreed upon in October for five criminal charges, including a felony violation of the Lacey Act, related to illegally importing wood from protected Siberian tiger habitat in the Russian Far East.
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The Department of Justice sentenced Lumber Liquidators this week per the settlement agreed upon in October for five criminal charges, including a felony violation of the Lacey Act, related to illegally importing wood from protected Siberian tiger habitat in the Russian Far East.
Lumber Liquidators must pay a total of $13.2 million in fines, parts of which will fund conservation efforts including the development of the Forest Product Laboratory’s XyloTron wood species identification device reported on by HF magazine in 2014.
"This company left a trail of corrupt transactions and habitat destruction. Now they will pay a price for this callous and careless pursuit of profit."
Although the terms of the sentencing had already been announced last fall when Lumber Liquidators pled guilty, the sentencing announcement immediately sparked a 17 percent increase in the company’s stock, which was trading at $12.74 before the announcement. Afterward, the stock went as high as $14.23 before ending the day at $13.35. Lumber Liquidators stock was at $69.22 on Feb. 23, 2015, before the company announced a pending "60 Minutes" investigation about formaldehyde levels in its Chinese-made laminate.
At least one publication surmised that Wall Street confused the announcement with the looming conclusion of the laminate formaldehyde investigation stemming from a “60 Minutes” investigation in March. “Oops, wrong settlement,” reported Kevin Dugan in the NY Post. Dugan spoke with an analyst at financial services firm Wedbush who said investors may have reacted to the sentencing announcement before knowing what was actually in the settlement.
In fact, the DOJ’s sentencing announcement was nearly identical to the one released after Lumber Liquidators settled in October.
Lumber Liquidators is guilty of five criminal charges because it illegally imported Mongolian oak from protected forests in Russia. Those forests provide habitat to the only wild Siberian tigers left on Earth. The total fine is the largest U.S. penalty ever for timber trafficking.
“The case against Lumber Liquidators shows the true cost of turning a blind eye to the environmental laws that protect endangered wildlife,” said John C. Cruden, assistant attorney general for the Department of Justice’s Environment and Natural Resources Division, in a statement. “This company left a trail of corrupt transactions and habitat destruction. Now they will pay a price for this callous and careless pursuit of profit.”
