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United States of America v. Essential Oils, L.C.
Federal Courthouse - Salt Lake City, Utah
Case Number: 2:17-cr-00541-DBP
Court: United States District Court for the District of Utah (Salt Lake County)
Plaintiff's Attorney: Jared C. Bennett
Defendant's Attorney: Craig D. Galli
Description: Salt Lake City, UT - Essential Oils Company Sentenced for Lacey Act and Endangered Species Act Violations to Pay $760,000 in Fines, Forfeiture, and Community Service, and to Implement a Comprehensive Compliance Plan
YOUNG LIVING ESSENTIAL OILS, L.C., (the Company), headquartered in Lehi, Utah, pleaded guilty in federal court to federal misdemeanor charges regarding its illegal trafficking of rosewood oil and spikenard oil in violation of the Lacey Act and the Endangered Species Act. The Company voluntarily disclosed its rosewood oil violations and has been cooperating with government investigators. Pursuant to the terms of the plea agreement, the Company was sentenced to a fine of $500,000, $135,000 in restitution, a community service payment of $125,000 for the conservation of protected species of plants used in essential oils, and a term of five years’ probation with special conditions. The conditions include the implementation of a corporate compliance plan, audits, and the publication of statements regarding its convictions.
“The importation of illegally harvested wood and timber products harms law-abiding American companies and workers and threatens forest resources around the world,” said Acting Assistant Attorney General Jeffrey H. Wood of the Environment and Natural Resources Division. “Our Division was proud to work alongside the U.S. Attorney’s Office in the District of Utah, the U.S. Department of Agriculture, the U.S. Fish and Wildlife Service, and the Department of Homeland Security to bring this case to a positive conclusion.”
“While the natural resource violations by certain employees of Young Living were intentional and substantial, the Company’s decision to conduct an internal investigation, voluntarily disclose the initial violations to government enforcement authorities, and cooperate throughout the ensuing investigation is to be commended,” said U.S. Attorney John W. Huber for the District of Utah. “This sentence reflects both the seriousness of the offenses and the acceptance of responsibility and cooperation by the Company.”
According to the plea agreement, from June 2010 to October 2014, several company employees and contractors harvested, transported, and distilled rosewood (Aniba roseaodora or Brazilian rosewood) in Peru and imported some of the resulting oil into the United States, through Ecuador. Peruvian law prohibits the unauthorized harvest and transport of timber, including rosewood. Neither the Company nor its suppliers, employees, or agents had any valid authorization from the Peruvian government. Peru also prohibits the export of species protected under the Convention on International Trade in Endangered Species (CITES), without the required permits. The Company did not obtain any CITES export permits from Peru. Between 2010 and 2014, a few Company employees harvested, transported, and possessed a total of approximately 86 tons of rosewood, all of which was harvested in violation of Peruvian law. The rosewood was intended for distillation and export to the United States and some had already been illegally brought over. The Company lacked an internal compliance program or formal procedures, training, or means to review and resolve problems and identify and stop potential violations. As a result, the Company hired outside counsel to conduct an internal investigation into the violations due to the illegal harvesting and shipping of plants that occurred in Peru and Ecuador. On July 20, 2015, once the internal investigation was complete, the Company made an initial written voluntary disclosure to the Government of various facts indicating their potentially illegal violations.
The investigation revealed that, in addition to the conduct disclosed by the Company, in December 2015, the Company exported spikenard oil harvested in Napal to the United Kingdom, without a CITES permit. The spikenard oil was previously imported from a company in the United Kingdom that had obtained a CITES export permit. The Company found the product to be unsatisfactory and shipped it back to the United Kingdom. On March 23, 2016, a Company employee filed an application for a CITES permit for this shipment after the fact, and without providing the required copy of the permit authorizing its original export from the United Kingdom.
The investigation also revealed that between November 2014 and January 2016, the Company purchased over 1,100 kilograms of rosewood oil from a supplier/importer in the United States without conducting sufficient due diligence to verify lawful sourcing of that oil.
The Government calculates the fair market retail value of the plant products involved in the violations and relevant conduct, including but not limited to product equaling approximately 1,899.75 liters of rosewood oil, to be more than $3.5 million but not more than $9 million.
The investigation was conducted by the Law Enforcement Offices of the U.S. Department of Agriculture, Office of the Inspector General, with assistance of the U.S. Fish and Wildlife Service and the Department of Homeland Security, Investigations. This case is being prosecuted by the Justice Department’s Environment and Natural Resources Division’s Environmental Crimes Section and the District of Utah’s U.S Attorney’s Office.
Outcome: Defendant pleaded guilty and agree to pay $760,000 fine.