Hobby Lobby Must Hire Customs Lawyer and Broker, DOJ Says in $3 Million Settlement of Imports of Mislabeled Artifacts

Hobby Lobby Stores reached a $3 million settlement with the Justice Department over improper imports of Iraqi artifacts, the U.S. Attorney's Office for the Eastern District of New York said in a July 5 news release (here). The "ancient clay artifacts originated in the area of modern-day Iraq and were smuggled" into the U.S., DOJ alleged in the civil complaint, filed on July 5 (here). The shipping labels "falsely described cuneiform tablets" as tile “samples,” DOJ said. The company must hire customs counsel and customs brokers as part of the settlement.

The settlement follows Hobby Lobby's efforts to acquire "historically significant manuscripts, antiquities and other cultural materials," DOJ said. Those items were sought as part of a "collection of historically and religiously important books and artifacts about the Bible," the company said in a statement (here). The company was considering a large purchase of artifacts in 2010 and sought an expert's opinion on importing cultural property. The expert advised an in-house lawyer at Hobby Lobby that items that may come from Iraq include additional risks due to import restrictions, according to the compliant. That opinion wasn't passed along to "anyone involved in the purchase and importation," DOJ said.

During that same period, Hobby Lobby also had an International Department "tasked with facilitating the importation and customs clearance of merchandise," DOJ said. That department advised a Hobby Lobby employee that was curating the collection "that the Artifacts should be imported using" a customs broker, DOJ said in the complaint. "However, after the Customs Broker reported that the Artifacts could be detained by CBP, the Curator" went around the International Department and asked that the dealers handle the shipping arrangements, the compliant said. Despite the warnings that further due diligence seemed necessary, Hobby Lobby agreed to buy "5,500 Artifacts, comprised of cuneiform tablets and bricks, clay bullae and cylinder seals, for $1.6 million," a purchase that was "fraught with red flags," DOJ said.

A dealer in the United Arab Emirates and two others from Israel then shipped the artifacts to three different corporate addresses in Oklahoma City, where Hobby Lobby is based, DOJ said. "Between one and three shipments arrived at a time, without the required customs entry documentation being filed with CBP, and bore shipping labels that falsely and misleadingly described their contents as 'ceramic tiles' or 'clay tiles (sample),'" DOJ said. "After approximately 10 packages shipped in this manner were received by Hobby Lobby and its affiliates, CBP intercepted five shipments." Another shipment arrived in 2011 with a false country of origin, DOJ said.

Hobby Lobby will implement new import compliance policies as part of the July 5 settlement agreement. The company agreed to hire "qualified customs counsel" to provide or supervise training, give advice on importing cultural property and submit quarterly reports on imported artifacts to the DOJ. Hobby Lobby will also "engage a qualified customs broker to provide customs brokerage services for all importations of Cultural Property," according to the settlement. The $3 million will go to CBP, it said.

The company will also forfeit the imported artifacts. “American collectors and importers must ensure compliance with laws and regulations that require truthful declarations to [CBP], so that Customs officers are able to scrutinize cultural property crossing our borders and prevent the inappropriate entry of such property,” Acting U.S. Attorney Bridget Rohde said in the DOJ release. “If they do not, and shippers use false declarations to try to clandestinely enter property into the United States, this Office and our law enforcement partners will discover the deceit and seize the property.”

Hobby Lobby should have used more caution, the company said in its statement. When it began buying the artifacts, Hobby Lobby was "new" to that world and didn't "fully appreciate the complexities" involved, Hobby Lobby said. Since learning of the problems, Hobby Lobby "has been an active participant with the government’s investigation and supports its efforts to protect the world’s ancient heritage." Hobby Lobby President Steve Green said the company "should have exercised more oversight and carefully questioned how the acquisitions were handled." Green said the company has "accepted responsibility and learned a great deal."

Email ITTNews@warren-news.com for a copy of the settlement agreement.