Business ProfileforLL Flooring

Gov. Action
The following describes a government action that has been resolved by either a settlement or a decision by a court or administrative agency. If the matter is being appealed, it will be noted below.

On March 12, 2019, Lumber Liquidators, in the United States District Court for Eastern District of Virginia, Richmond Division entered into a settlement agreement with the United States Department of Justice and the United States Securities and Exchange Commission who also presented the company with a Cease-and-Desist Order.

Lumber Liquidators was charged with parallel criminal actions which included both the U S Department of Justice and the U S Securities and Exchange Commission. These charges were, false, misleading and misrepresenting to investors concerning its product testing and regulatory compliance program in connection with the sourcing and sale of laminate flooring products.

Lumber Liquidators was charged with felony criminal fraud by the Department of Justice and agreed to pay a total criminal penalty of $33 million to the United States, this total fine includes a criminal fine in the amount of $19,095,648 payable to the United States Treasury within thirty (30) days after the filing of this settlement, and $13,904,352 in forfeiture to the United States. The Department of Justice agreed to credit the amount paid to the SEC in disgorgement as part of its agreement. The combined total amount of criminal and regulatory penalties paid by Lumber Liquidators will be $33 million.

According to the agreement between Lumber Liquidators and the two government agencies, under the deferred prosecution agreement, the prosecution of the company for the above mentioned frauds will be deferred for the TERM period of three years which will allow Lumber Liquidator to demonstrate good conduct. The penalties reflect the nature and seriousness of the conduct, as well as Lumber Liquidators on going cooperation with these agencies in its extensive efforts at remediation. These remedial efforts include among other things; suspension of the sale of all laminate flooring from China, offering consumers in-home testing for already installed flooring, and implementing new policies and procedures regarding compliance with the California Air Resources Board (CARB) emission standards and other environmental regulations, sourcing of flooring products, financial reports and internal control, and all documents and other non-privileged materials, wherever located, in Respondent's possession, custody, or control, and/or appropriate privilege logs, as reasonably requested by the Division staff. The employees who were involved in the initial wrongdoing were either terminated or resigned from Lumber Liquidators, and the company has replaced its executive management team with experienced executives.

For full details regarding these government actions please visit the Department of Justice documents: Download ll_criminal_information.pdf and Download ll_dpa.pdf.