U.S. v. Lumber Liquidators, Inc. Patrick Duggan DOJ Environmental - PowerPoint PPT Presentation

U.S. v. Lumber Liquidators, Inc. Patrick Duggan DOJ Environmental Crimes Section April 6, 2016 tment of Forest Trends TREE Meeting: Prague, Czech Republic 4/20/2016 United States Depar Justice 1

Overview • Case summary • Case results • Environmental Compliance Plan • Impact tment of 4/20/2016 United States Depar 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 tment of 4/20/2016 United States Depar 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 tment of 4/20/2016 United States Depar Justice 4

Case Initiation • Selling the Case ECS • Impact • Value APHIS FBI • Publicity • Ease ICE-HSI AFMLS • Hand search • International cooperation ICE-TTU USFS USFWS tment of 4/20/2016 United States Depar Justice 5

Case Development • Interviews (covert) • Search Warrant tment of 4/20/2016 United States Depar Justice 6

Evidence: Knowledge LL Lacey Act 2010 Manual tment of 4/20/2016 United States Depar 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 tment of 4/20/2016 United States Depar 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 tment of 4/20/2016 United States Depar Justice 9

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Evidence: Illegal Logging in Russia Number of POs imported under permit 0100/2008 77 Value $7,740,033.84 Total Cu. M Shipped April 2013 to July 2013 Hexin Russian Oak 2,494.80 Maximum Potential POs under Permit 0100/2008 9 Value $904,679.28 Total illegally harvested POs 68 Value $6,835,354.56 tment of 4/20/2016 United States Depar Justice 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 tment of 4/20/2016 United States Depar Justice 12

Plea Conditions • ECP • Community Service • Forfeiture • Lacey Fund tment of 4/20/2016 United States Depar Justice 13

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: tment of 4/20/2016 United States Depar Justice 14

ECP: Oversight tment of 4/20/2016 United States Depar Justice 15

ECP: Risk tment of 4/20/2016 United States Depar Justice 16

ECP: Vendor Validation tment of 4/20/2016 United States Depar Justice 17

ECP: Document Review tment of 4/20/2016 United States Depar Justice 18

Impact • Compliance expectations are heightened • Status quo not acceptable • Knowledge pool • Modes of illegality • Locations of illegality • Complacency • Device • NGO cooperation tment of 4/20/2016 United States Depar Justice 19

Contact Patrick Duggan Patrick.Duggan@usdoj.gov (202) 305-0321 Trial Attorney Dept. of Justice Environmental Crimes Section tment of 4/20/2016 United States Depar Justice 20