Virginia-based flooring supplier haunted by 2015 missteps from investigation of defective, formaldehyde-tainted flooring imports from China.
The Justice Department said Lumber Liquidators, a Toano, Va.-based flooring products company, will pay a $33 million penalty for filing a false and misleading statement to investors regarding the U.S. sale of defective and noncompliant Chinese flooring imports.
The penalty includes a criminal fine of $19 million and $14 million in forfeiture. This amount represents the company’s net profits from the sale of 100 percent of its Chinese laminate from Jan. 16 to May 7, 2015, the Justice Department said.
The false statements were filed by Lumber Liquidators after the March 2015 airing of a “60 Minutes” program by CBS, which exposed the company’s sales of defective and formaldehyde-tainted flooring. At the time, the company claimed to comply with the California Air Resources Board regulations with its investors, although it knew two years earlier about the product failure.
In 2014, a U.S. laminate supplier informed Lumber Liquidators that it tested a Chinese laminate sample purchased from one of Lumber Liquidators’ stores in the U.S. and that the sample emitted high levels of formaldehyde.
Lumber Liquidators has paid other government penalties in recent years, including more than $13.15 million in criminal fines, community service and forfeited assets in early 2016 related to its import of hardwood flooring from China that was illegally harvested timber in the Far East.
At that time, the violation resulted in the largest financial penalty for timber trafficking under the Lacey Act, according to the Justice Department.
