The Department of Justice reports that two individuals have each been sentenced to 57 months in prison for illegally importing and selling between $25 million and $65 million worth of plywood products in violation of the Lacey Act and customs laws. They were also ordered to pay $42.4 million in forfeitures as well as $1.6 million in storage costs incurred by the government when they declined to abandon wood seized by the government. Finally, for three years following their prison terms they will be prohibited from engaging in businesses regarding importing or exporting products specifically protected under the Lacey Act.
According to the DOJ, these individuals (and an employee also fined as part of this enforcement action) engaged in “a sophisticated scheme” to evade antidumping and countervailing duties of more than 200 percent on hardwood plywood products made in China by falsely declaring the species, country of origin, or country of harvest of the wood from which the plywood was made. For example, they caused containers of plywood to be shipped from China to Malaysia or Sri Lanka, where the wood was taken out of its original containers and put into a second set of containers to conceal its Chinese origin. They also incorporated shell companies in the U.S. to import these products and accept payments from purchasers of violative shipments.
The DOJ states that this scheme violated U.S. customs laws that prohibit false statements in any import declaration without reasonable cause to believe the truth of those statements and that make it illegal to import goods contrary to law. It also violated the Lacey Act, which requires importers of plant products to file a declaration containing the plant’s scientific name and country of harvest (among other things) and makes it unlawful to transport or sell a plant product knowing that it or the plant it was made from was transported in violation of any plant-related law.
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