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

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

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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

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SLIDE 1

U.S. v. Lumber Liquidators, Inc.

Patrick Duggan

DOJ Environmental Crimes Section April 6, 2016

Forest Trends TREE Meeting: Prague, Czech Republic

1 4/20/2016 United States Depar tment of Justice

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SLIDE 2

Overview

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  • Case summary
  • Case results
  • Environmental Compliance Plan
  • Impact

4/20/2016 United States Depar tment of Justice

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SLIDE 3

Natural Resources

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  • 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

4/20/2016 United States Depar tment of Justice

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Natural Resources

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  • 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

4/20/2016 United States Depar tment of Justice

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Case Initiation

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FBI ICE-HSI USFWS APHIS AFMLS USFS ICE-TTU ECS

  • Selling the Case
  • Impact
  • Value
  • Publicity
  • Ease
  • Hand search
  • International cooperation

4/20/2016 United States Depar tment of Justice

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SLIDE 6

Case Development

  • Interviews (covert)
  • Search Warrant

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Evidence: Knowledge

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LL Lacey Act 2010 Manual

4/20/2016 United States Depar tment of Justice

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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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Evidence: False Declarations

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34 Purchase Orders declared as Quercus petraea when known species was Quercus mongolica Total Value of $ 3,417,677.28

4/20/2016 United States Depar tment of Justice

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SLIDE 10

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Evidence: Illegal Logging in Russia

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Total Cu. M Shipped April 2013 to July 2013 Hexin Russian Oak 2,494.80

Number of POs imported under permit 0100/2008 77 Value $7,740,033.84 Maximum Potential POs under Permit 0100/2008 9 Value $904,679.28 Total illegally harvested POs 68 Value $6,835,354.56

4/20/2016 United States Depar tment of Justice

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Outcome

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  • 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

4/20/2016 United States Depar tment of Justice

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SLIDE 13

Plea Conditions

  • ECP
  • Community Service
  • Forfeiture
  • Lacey Fund

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Environmental Compliance Plan

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  • 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:

4/20/2016 United States Depar tment of Justice

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ECP: Oversight

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ECP: Risk

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ECP: Vendor Validation

17 4/20/2016 United States Depar tment of Justice

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ECP: Document Review

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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

4/20/2016 United States Depar tment of Justice

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Contact

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Patrick Duggan Patrick.Duggan@usdoj.gov (202) 305-0321 Trial Attorney

  • Dept. of Justice

Environmental Crimes Section

4/20/2016 United States Depar tment of Justice