Trio Charged In Lumber Scam That Affected Area Construction -- Canadian Brothers, Two Mills Named In Fraud Counts Over Dishonest Upgrading Of Timber

After more than a year of detective work, Canadian authorities have arrested three brothers in connection with the lumber-grading scam that in 1990 victimized dozens of Seattle-area construction projects.

The three men work for BBM Lakeview Wholesale Lumber Ltd., a supplier based in Surrey, B.C. The firm was implicated in a similar lumber-grading rip-off in 1988.

A pair of Surrey mills, sources of wood for BBM Lakeview, also have been charged in the case.

In the scandal, thousands of lumber-grading stamps were sanded off, then replaced with a stamp indicating a higher-quality wood. The higher-quality wood sells at a higher price.

Contractors stopped work on construction projects because some low-grade wood had been wrongly certified as structurally sound.

Inferior studs were discovered - and some were pulled out - in single-family homes scattered around the Seattle area. Substandard wood also was found in a retirement home under construction in Lynnwood.

Workers also peeled back wall board from at least three large apartment complex projects. More than 100 buildings in King, Snohomish and Pierce were affected by the fraud.

Investigators in the commercial crime section of the Royal Canadian Mounted Police arrested Bob Johal, Minder Johal and Jerry Johal earlier this month, said Sgt. Peter Montague, a spokesman for the RCMP.

Each was charged in Surrey Provincial Court with seven counts of fraud involving dollar amounts of more than $1,000 (Canadian). The company itself also was charged with seven counts of the same offense.

Moga Timber Mill Ltd., and A.P. Timber Mill Ltd., also of Surrey, were each charged with one count of fraud involving more than $1,000 (Canadian).

BBM Lakeview and the two mills that have been charged have long been suspected as the source of the lumber-grading fraud.

BBM Lakeview pleaded guilty in 1988 of delivering fraudulently graded wood. The firm was fined $100,000 in provincial court. Moga Timber sent a letter to local lumber suppliers in 1990 accepting responsibility for the mis-marked wood.