TOANOA, VA - Lumber Liquidators headquarters and a retail outlet in Richmond, VA were searched by Federal Authorities yesterday. Immigration and Customs Enforcement and Homeland Security Investigations executed a search warrant at the flooring manufacturers company headquarters in Toano, VA and a nearby retail store.
Lumber Liquidators said in a statement the search related to the importation of certain of its wood flooring products.
"The company takes its sourcing and compliance very seriously, and is cooperating with authorities to provide them with requested information," said a statement from Ashleigh McDermott, in the flooring firm's investor relations department.
The warrant was executed in coordination with U.S. Fish and Wildlife and the Department of Justice. An environmental watchdog group, the Environmental Investigation Agency, issued a statement tieing the warrants at Lumber Liquidators into investigations into possible Lacey Act violations.
US to Issue Antidumping Duties on Chinese Engineered Wood Floors - See more at: http://www.woodworkingnetwork.com/wood-market-trends/woodworking-industr...
The Lacey Act, a century old law amended in 2008 to ban the trade of illegal timber and wood products, was cited in an enforcement against Gibson Guitar, settled last year last year.
One of the more recent high-profile cases concerning wood products under the Lacey Act, Gibson Guitar Company's Nashville headquarters was raided, resulting in a Criminal Enforcement Agreement with the Department of Justice, Gibson incurred penalties totaling a minimum of $600,000, including the forfeiture of wood taken from the protected forests of Madagascar.
Lumber Liquidators has been growing dramatically with the housing boom - net earnings were up 68% in its latest quarterly report, and its stock has risen steadily. Investment analyst Xuhua Zhou challenged Lumber Liquidators in a report recently, saying consumers had been complaining of performance problems with the wood flooring sourced in China.
In an earnings call in July, Lumber Liquidators said its proprietary brands, Virginia Mill Works Handscraped Hardwoods, Morning Star Bamboo and Bellawood lines, represent 95% of its sales. THe copany said it buys from 110 mills around the world, aith 60 people charged with monitor sourcing and quality.
It announced last month that it will spend up to $50 million on constructing a 1 million square foot wood flooring distribution center in Virginia. A 500,000 square foot West Coast center will open in Pomona, CA in November.