US v. Lumber Liquidators, Inc.

U.S. v. Lumber Liquidators, Inc.
Patrick Duggan
DOJ Environmental Crimes Section
April 6, 2016
4/20/2016
Forest
Trends
TREEDepartment
Meeting: Prague,
Republic
United
States
of Czech
Justice
1
Overview
• Case summary
• Case results
• Environmental Compliance Plan
• Impact
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United States Department
of
Justice
2
Natural Resources
• DOJ received information from EIA that LL was bringing in timber
products:
• Illegally harvested in Russian Far East;
• Transported to China for manufacturing;
• Falsely declared upon import into the U.S.
• The Russian Far East is:
• Mixed broadleaf forests of Korean pine
(CITES-III) and Mongolian oak (CITES-III)
• Extremely remote
• Known for illegal logging
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United States Department
of
Justice
3
Natural Resources
• The Russian Far East is also home to:
• The last 450 wild Siberian tigers (CITES-I), and
• The last 47 Amur leopards (CITES-I)
• Both cats are dependent on Mongolian oak and Korean pine forests for hunting & prey
species (boar, red deer rely on pine nuts & acorns)
• Greatest threat to the cats’ survival is illegal logging
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United States Department
of
Justice
4
Case Initiation
• Selling the Case
•
•
•
•
ECS
Impact
Value
Publicity
Ease
• Hand search
• International cooperation
FBI
APHIS
ICE-HSI
AFMLS
ICE-TTU
USFS
USFWS
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of
Justice
5
Case Development
• Interviews (covert)
• Search Warrant
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of
Justice
6
Evidence: Knowledge
LL Lacey Act 2010 Manual
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United States Department
of
Justice
7
Methods of Illegality
• The case involved two common methods of timber crimes:
1) Falsely declaring species and/or harvest country to cover up true product
2) Using a legitimate permit to launder illegally harvested timber
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United States Department
of
Justice
8
Evidence: False Declarations
34 Purchase Orders declared as Quercus petraea
when known species was Quercus mongolica
Total Value of $ 3,417,677.28
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United States Department
of
Justice
9
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United States Department
of
Justice
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Evidence: Illegal Logging in Russia
Number
of M
POs imported underShipped
permit 0100/2008
Total
Cu.
April 2013 to 77
July 2013
Maximum Potential POs under Permit 0100/2008
Total illegally harvested POs
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9
68
United States Department
of
Justice
Value Russian Oak
$7,740,033.84
Hexin
2,494.80
Value
Value
$904,679.28
$6,835,354.56
11
Outcome
• One felony violation, four misdemeanor violations
• First felony conviction under Lacey Act timber
amendments
• Largest Lacey Act criminal penalty ever
• $7.8 million criminal fine
• $1.2 million community service payments
• $4.5 million in forfeiture
• Detailed factual statement
• Environmental Compliance Plan
• Annual auditing and reporting to the court
• 5 years probation
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United States Department
of
Justice
12
Plea Conditions
• ECP
• Community Service
• Forfeiture
• Lacey Fund
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United States Department
of
Justice
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Environmental Compliance Plan
• Court-enforced measures to ensure that LL knows what they import
and who they are import it from.
• LL compliance decision-making process will be centralized,
documented and audited.
• Keep in mind:
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United States Department
of
Justice
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ECP: Oversight
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of
Justice
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ECP: Risk
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of
Justice
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ECP: Vendor Validation
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of
Justice
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ECP: Document Review
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of
Justice
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Impact
•
•
•
•
•
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Compliance expectations are heightened
Status quo not acceptable
Knowledge pool
• Modes of illegality
• Locations of illegality
• Complacency
Device
NGO cooperation
United States Department
of
Justice
19
Contact
Patrick Duggan
Patrick.Duggan@usdoj.gov
(202) 305-0321
Trial Attorney
Dept. of Justice
Environmental Crimes Section
4/20/2016
United States Department
of
Justice
20