(Reuters) - Lumber Liquidators Holdings Inc will pay about $13.2 million in fines and forfeitures to resolve a U.S. Department of Justice investigation into the import of certain flooring products in 2013, the department said.
The hardwood flooring retailer’s shares rose as much as 16.8 percent on Monday.
Lumber Liquidators has also agreed to an organizational probation of five years, implementation of a strict environmental compliance plan and independent audits, the department said.
The charges are linked to the “use of timber that was illegally logged in Far East Russia, as well as false statements on Lacey Act declarations which obfuscated the true species and source of the timber,” the department said.
This is the first felony conviction related to the import or use of illegal timber and the largest criminal fine ever under the Lacey Act, according to the department.
The Lacey Act is a conservation law aimed at protecting plants, fish and wildlife.
“Lumber Liquidators is pleased to put this legacy issue behind us,” a company spokesman said in an email.
The company agreed in October to plead guilty to violations of a customs law and the Lacey Act for importing products from some suppliers who had harvested more timber in foreign locations than their permits allowed.
Lumber Liquidators will have to pay $7.8 million in criminal fines, $1.23 million in community service payments, $969,175 in forfeited proceeds and more than $3.15 million in cash through a related civil forfeiture.
Under the environmental compliance plan, Lumber Liquidators will also have to verify all wood it imports back to the source of harvesting.
Lumber Liquidators is under a separate investigation into charges that its laminate products sourced from China contain excessive levels of formaldehyde, a known carcinogen, following a report by CBS’s “60 Minutes” in March.
The company’s shares were up 5 percent at $13.55 in afternoon trading on Monday.
Up to Friday’s close, the stock had fallen 81 percent since Feb. 24, when Lumber Liquidators said CBS would air the allegations.
Reporting by Siddharth Cavale and Ramkumar Iyer in Bengaluru; Editing by Kirti Pandey