Lumber Liquidators Will Pay $ 33 Million for Misleading Investors About Formaldehyde in Laminate Flooring

Lumber Liquidators, one of the country's largest flooring retailers, has agreed to pay a $ 33 million fine for misleading investors on laminate flooring in China containing formaldehyde.

The investigation and agreement with federal prosecutors in the Eastern District of Virginia was the result of a "60-minute" investigation conducted in 2015, which found high levels of formaldehyde in Lumber Liquidators laminate flooring.

The Toano, Virginia-based company has agreed to pay a $ 19 million criminal fine and a $ 14 million forfeiture.

In a statement, US lawyer G. Zachary Terwilliger said the company had "cooperated with the investigation of the government, completely replaced his management team and installed experienced executives who had committed to create an ethical business culture. "

Centers for Disease Control and Prevention concluded that the level of formaldehyde in the flooring in question would increase the risk of cancer and could cause respiratory problems for people with asthma and irritation of the eyes, nose and throat.

According to prosecutors, Lumber Liquidators denied the accusations made by "60 Minutes" at the time, and misled investors by retaining the internal information that substantiated the report.

The company has already agreed to pay $ 36 million in settlements to 760,000 customers who purchased the laminate flooring. The company stopped selling laminate flooring from China in May 2015, and prosecutors said all employees involved in wrongdoing had been fired or resigned.

The company paid $ 23 million in penalties, fines and penalties in 2016 for selling illegally smuggled timber to endangered Russian tiger habitats. But this regulation did not solve the problem of formaldehyde which, at the time, had triggered new lawsuits.

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