On Monday, September 18, 2017, the Justice Department announced that Young Living Essential Oils, which is headquartered in Lehi, Utah, had pleaded guilty to federal misdemeanor charges. The charges are related to the company’s illegal trafficking of spikenard oil and rosewood oil in violation of the Lacey Act and the Endangered Species Act. The firm voluntarily disclosed its rosewood oil violations and had been cooperating with investigations.
As a part of the agreement, Young Living Essential Oils will pay a fine of $500,000, restitution of $135,000 and a community service payment of $125,000. The company will also face five years of probation with special conditions. The company will be forced to implement a corporate compliance plan and publish statements regarding their convictions. It will also be subject to audits.
The plea agreement shows that between June 1010 and October 2014 several employees and contractors harvested, transported and distilled rosewood in Peru and imported some of the final product to the United States through Ecuador. Peruvian law prohibits unauthorized harvest and transport of timber. The company, its suppliers, employees or agents did not have valid authorization from the Peruvian government.
Peru has also banned the export of species protected under the CITES, Convention on International Trade in Endangered Species act, without permits. Unfortunately, Young Living Essential Oils did not have permits. It is estimated that the company’s employees harvested, transported and possessed roughly 86 tons of rosewood between 2010 and 2014.
The company did not have an adequate internal compliance program to prevent such violations. The company eventually hired an outside counsel to investigate the alleged violations. On July 20, 2015, the company made voluntary disclosure to the government confirming the potentially illegal violations. The investigation also concluded that in December 2015, it exported spikenard oil harvested in Nepal to the United Kingdom. It did so without a CITES permit.
Between November 2014 and January 2016, the company bought more than 1,100 kilograms of rosewood oil from a supplier in the United States. It did so without conducting adequate research to ensure lawful sourcing of the oil. The Government believed that the fair market value of the materials involved in the allegations to be more than $3.5 million, but less than $9 million.