Russian Far East
Hardwood Flooring, Organized Crime, and the World’s Last Siberian Tigers
On October 7, 2015, Lumber Liquidators pled guilty to smuggling illegal wood into the United States. For the latest in this story, click here.
In 2013, EIA released an investigative report that detailed the extent and nature of illegal logging in the Russian Far East (RFE). The investigations tracked illegally harvested hardwoods across the Russian border into China, through factories and warehouses, to showrooms around the world. The illegal wood was, and still is, then purchased by consumers unaware of the devastating effects on the environment, local peoples, and the forest industry, as well as on law enforcement and governance throughout the RFE.
EIA’s investigation revealed that since the 2008 Lacey Act amendments became law, Lumber Liquidators has imported millions of square feet of solid oak flooring from a manufacturer that freely describes its own illegal logging practices and that buys wood from suppliers that are under scrutiny by Russian authorities for illegal logging in the most threatened temperate forest in the world.
During a multi-year investigation, Lumber Liquidators, the largest specialty retailer of hardwood flooring in the United States, emerged as the strongest example of a U.S. company whose indiscriminate sourcing practices link U.S. consumers to the destruction of critically endangered tiger habitat and forests in the RFE.
Last year, in December 2014, a Russian supplier to Lumber Liquidators was convicted of organized crime by Russian courts. The company, Beryozoviy, had been found by EIA investigators as playing a key role in supply chains to a Chinese flooring manufacturer—the primary manufacturer of Lumber Liquidators’ Virginia Millworks line of solid oak flooring.
The conviction of Beryozoviy leadership showed decisive action by the Russian government against a Lumber Liquidators’ supplier.
Just a few months after this conviction, Lumber Liquidators revealed in SEC filings that the Department of Justice was considering criminal charges under the Lacey Act for importing illegally harvested wood. Following this announcement, Lumber Liquidators’ stock value dropped nearly 20 percent.
In October 2015, Lumber Liquidators pled guilty to smuggling illegal timber, including one criminal felony count of entry of goods by means of false statements and four misdemeanor counts of violating the Lacey Act. The company will pay over $10 million in penalties to the U.S. Department of Justice, including $7.8 million in fines to the Lacey fund, $1.2 million Community Service payments, and $969 thousand in forfeited proceeds. The DOJ found that Lumber Liquidators committed systemic fraud and sourced illegal timber from the Russian Far East and other high risk countries.
The forests of the world are facing an environmental, social and economic crisis fueled by growing demand for cheap wood and timber products in the United States, China, Japan, the European Union and elsewhere. Companies like Lumber Liquidators that are violating the law must be held to account for the devastating impact of their indiscriminate sourcing practices on the forests and people of the world. Moreover, without action by governments to enforce laws like the Lacey Act, the consumer will unwittingly remain the source of wealth that funds the mafias who are raiding the world’s forests.
Watch our Investigative Video on Illegal Logging in the RFE
“On behalf of our 2.1 million members and supporters, the Sierra Club applauds the work of the Environmental Investigation Agency to shine a light on the illegal timber trade. Illegal logging and trade in illegally harvested timber destroys wildlife habitat, disrupts our climate, and threatens American jobs in the wood and wood products industries. And it's happening right behind our backs. Now more than ever, we need full funding and implementation for tools like the Lacey Act to stop the trade of illegal timber."
To download the report, Click Here