US hardwood flooring retailer to pay US$10m in penalties

12 October 2015

Lumber Liquidators, the largest hardwood flooring retailer in the US, will pay more than US$10m in penalties to the Department of Justice after pleading guilty to violations of the Lacey Act which governs the import of timber products.

The agreement will also see the company placed on a five-year probationary period while it implements an environmental compliance plan.

The penalties relate to allegations of illegal timber sourcing from Russia and other “high risk” countries for wood used in some of its hardwood flooring products.

The company determined in the second quarter of 2015 that there were Lacey Act compliance concerns related to a limited amount of its engineered hardwood flooring.

As a result, it suspended sales of approximately US$4.1m of this product pending further investigation, and brought this matter to the attention of the Department of Justice.

During the investigation, the company determined there were no compliance concerns with respect to approximately US$900,000 of the suspended engineered hardwood flooring.

As part of the agreement with the Department of Justice, the company also reached a settlement related to the remaining $3.2m of suspended engineered hardwood flooring.

In the settlement, a $3.2m payment will be made in lieu of a civil forfeiture of this product, and the company will be permitted to sell the suspended engineered hardwood flooring and retain any proceeds of the sale.

“We are pleased to reach this agreement and resolve a legacy issue related to the Lacey Act,” said John M Presley, chairman of Lumber Liquidators.

“We will continue to focus on strengthening Lumber Liquidators across every area of the organisation and executing on our value proposition to improve operational efficiencies and deliver value to our stakeholders.”

With more than 370 locations, Lumber Liquidators is North America's largest specialty retailer of hardwood flooring.