Whistleblower alleges wood stove manufacturer defrauded retailers and customers

Breaking update: April 15 2022: A year after a whistleblower provided the EPA with extensive evidence of fraud and violations of stove regulation at the US Stove company, the EPA appears to be aggressively investigating the case.  The whistleblower initially the EPA's Office of Enforcement (OECA), who appeared to do very little for most of the past year.  But a breakthrough happened when Special Agents of the EPA's Office of the Attorney General (OIG) responded to a short form on the Attorney General website for members of the public to raise concerns.   It is not clear if the OIG office knew that OECA was already supposed to be investigating the case and already had documents from the whistleblower.  

The case involves more than 4,000 2015 certified stoves that were sold and delivered to Tractor Supply that US Stove claimed were 2020 certified.  Randall Dodds, a Vice President at Tractor Supply in charge of the order from US Stove, was allegedly unaware that US Stove had provided them with 2015 certified stoves at end of 2019, when they needed to stock up on 2020 certified stoves.  When Tractor Supply found out about the alleged fraud, they had already shipped the stoves and begun selling them at their retail outlets in boxes that claimed they were 2020 certified, according to multiple sources.  Mr Dodd declined to discuss "its vendor relationships with third parties."  

The original whistleblower remains under a Restraining Order, given by a local judge to US Stove because the judge thought "the public interest would be served by granting the requested temporary restraining order." At that time, the public was being misled and sold stoves that were mislabeled and more polluting.  No notice, recall or compensation has been offered to consumers.

Breaking update: April 16, 2021:  US Stove Co. got a temporary Restraining Order against the whistleblower requiring him to refrain from accessing, publishing, disclosing, or otherwise disseminating USSC’s confidential information to any third party. The Temporary Restraining Order also requires him to return all USSC documents containing Confidential Information within 48 hours of receipt of the Temporary Restraining Order.  There will be a hearing on April 26 in a Tennessee Court for a Temporary Injunction and "other appropriate relief."  As the EPA investigation gears up, US Stove could sue the whistleblower for damages, requiring substantial legal fees on both sides. 

April 9, 2021 - US Stove Co., a Tennessee-based company that manufactures most of their stoves in China has been accused by a former employee of fraudulent activity, which he also reported to the EPA enforcement division.  The employee who wishes to remain anonymous, alleged the company told retailers that a popular stove model complied with 2020 EPA emission standards. If those allegations are confirmed, thousands of people may have purchased far dirtier stoves than they thought they were buying and lead to massive fines for the company.

The old and new model of the 1269
look exactly alike and has a similar
model number. 

The whistleblower says that more than 4,000 model 1269E stoves were sold to Tractor Supply Company during 2019 and 2020. According to the whistleblower, US Stove Co. told Tractor Supply that the stoves complied with the 2020 emission standards and about 900 were sold after the May 15, 2020 deadline when all stoves had to be 2020 compliant.  The 1269E emitted 4.2 grams of particulates per hour based on EPA approved certification testing.  The newer US 1269E was tested at 1.8 grams an hour.

 

A representative of US Stove Co. vigorously denied these allegations, saying that “U.S. Stove has never sold a non-compliant product to Tractor Supply or ‘other outlets’. Further, U.S. Stove has never misrepresented the 1269E model as a 2020-compliant model, and further has never shipped 1269Es as if they were US1269Es.”

August Jones, President on left, with
Richard Rogers, Chairman of the
Board in their warehouse in 2019.

US Stove may be the oldest operating stove manufacturer in the US and is still owned and operated by the Rogers family.  The company was original based in upstate New York, and used extensive prison labor in its operations.  When that practice was banned in 1886, the company moved south, in part to avoid unionized labor.  But after a 1927 union fight, the company closed for a period until S. L. Rogers incorporated US Stove Corporation in 1930.  Today, Richard Rogers is the Chairman of the Board and his nephew, August Jones, is the President.  

Documents and emails viewed by AGH tell a different story, indicating that US Stove Co. was shipping 1269Es and telling Tractor Supply they were US1269Es, which were 2020 compliant.  EPA regulations stipulate that you cannot market or sell a stove model until the EPA has issued a certificate of compliance.  Polytest, the test lab that did the emission testing for the US1269E, completed their report on August 26, 2019.  Yet, documents appear to show that between June and September of 2019, US Stove Co. purchased 4,144 US 1269E’s from Jinhua Jason and Ningbo Precise, two factories in China.  The Certificate of Conformity was issued by PFS-TECO, the third-party reviewer to John Vorhees, a senior engineer at US Stove Co. Tractor Supply issued purchase orders for the US1269E’s in March of 2019. The national hardware chain reportedly received the stoves and paid the invoices between June and August 2019.   At issue is when US Stove released the first model plate for the US1269E.  There is no allegation of wrongdoing by Polytest lab or PFS-TECO.

The permanent metal name plates on
the back of the 1269Es are made and
affixed in China, and stoves sent
directly to Tractor Supply.

In February 2020, the Alliance for Green Heat (AGH) was contacted by a consumer who thought he was buying the 2020 compliant US1269E, but when he opened the box, it was the 1269E. He asked “why the box says one thing but the identity on the stove says something different. …  I checked other stores and they have the same small wood stoves with the same descrepancy.[sic]  I called the company about this situation and the young girl gave me the impression there is no difference.”

 

According to the former US Stove Co. employee, Tractor Supply may not have known that the description of the stove on the box did not match the EPA nameplate on the back of the stove, or that the devices “were actually twice as dirty and not what the customers were expecting.”  Mary Winn Pilkington, Tractor Supply’s communications officer confirmed that the company was investigating this issue but did not yet have any comment.

In response to a request for a statement by AGH, the EPA said that "you may be assured we take allegations of fraud very seriously and are working to address the concerns you have raised."  The EPA's statement thanked AGH for providing them information about this case, however the information was sent by whistleblower to EPA office of Enforcement before AGH received it.  (See full statement below)

One outlet is now selling the 1269
for $428, possibly making it the 
cheapest EPA certified stove on
the market, a key reason that 
explains the high sales volumes

US Stove Company is well-known within the industry for selling low-cost wood stoves through hardware chain stores and online and experts believe it is probably the highest volume seller of stoves in North America, although actual sales figures are kept secret.  Both the older version of the 1269 and the 2020 compliant version sell for under $600 and it is not clear how much the company had to adjust the design to meet the stricter emissions requirements.

 

April 2020 flood damage US Stove facilities

In April of 2020, a severe storm brought heavy flooding to South Pittsburg, damaging hundreds of stoves and stove parts at US Stove Co.  The whistleblower also alleges that products US Stove claimed to be damaged by the flood in April was put back into stock in September and sold as new. This product was detailed as “scrapped” to the insurance adjustor.

 

The whistleblower also contacted Tractor Supply to alert them of potentially dangerous products that they may have sold.  “I'm having a hard time sleeping knowing the risk of fire, injury or even death could be caused by this water damaged product in the homes of families,” he told the buyer at Tractor Supply.

 

A company representative said in an email that “U.S. Stove was damaged by a flood in one of its warehouses. U.S. Stove worked with its insurance company to recover its damages. U.S. Stove did not sell flood-damaged stoves as new.”

Third party certifiers
are supposed to double check
the testing process, but have
no role in reviewing 
manufacturing or shipping

It is unclear whether this could lead to a recall of stoves, if the allegations are confirmed.  For stoves that may have been improperly labelled as 2020 compliant, Tractor Supply may have an obligation to notify them and offer a refund.  Previously, the largest recall of stoves in the past two decades also involved a U.S. Stove product when 4,400 window mounted pellet stoves were recalled.  

 

The Alliance for Green Heat has often contacted US Stove over the past 10 years after finding scores of non-compliant US Stove products on the market as well as examples of misleading advertising.  In 2012, US Stove products and those of other companies appeared to mislead consumers about their certification status.

 

In June of 2017, AGH found many non-compliant furnaces made by US Stove on the market.  AGH contacted nine of the retailers, and of those, six stopped advertising those boilers within 2 weeks. Others continued advertising uncertified wood furnaces after being alerted they were illegal to sell, including Sears’ online marketplace (orders fulfilled by the third party 123Stoves, Inc.), Homeclick, and HVAC direct. HVAC Direct continued to sell uncertified furnaces until they stopped in March, 2021 after pressure from a facebook campaign.  The EPA was aware of all these instances of non-compliant furnace sales but said they cannot discuss any enforcement actions.  There is little indication that they took any enforcement action in these cases.

 

An advertisement for a non-compliant
 US Stove boiler being sold in April
2021. The seller has two unused ones.

Today, AGH found brand new non-compliant US Stove furnaces (model 1660EFE) being sold on facebook  by a private individual in Jasper, Tennessee. This is a town adjacent to South Pittsburg where US Stove is headquartered and a number of US Stove employees and executives live.

The allegations from this senior executive of a stove manufacturer may represent the first time an industry insider has publicly blown the whistle in what is often seen as a tight-knit community where colleagues protect one another.  And it appears to be a coincidence that these allegations are coming out on the heels of scathing reports from NESCAUM and the State of Alaska that EPA’s enforcement of wood heater regulations are “dysfunctional.”  These reports led to the EPA announcing an extraordinary shake-up of its wood heater enforcement program.  This instance of alleged fraud may become one of the first test cases of how the EPA is ramping up enforcement of its wood heater regulations.

Tractor Supply was still selling the 1269
earlier in 2021 but they appear to have 
removed it from their website.

 

This whistleblower says that after raising his concerns internally, he was forced out of the company.  Now, he says he is worried about retaliation and how he can “resume support for my family in the future.”

Statement by the EPA's Office of Media Relations

April 8, 2021

Thank you very much for contacting the Environmental Protection Agency (EPA) regarding potential fraud at U.S. Stove.  We appreciate the efforts you have made to date in collecting information and your willingness to share it with us. We are very much interested in understanding better the facts surrounding this case and want to assure you that EPA is committed to reviewing the information you have provided as quickly as possible.  As an open enforcement action, EPA does not comment on the specifics involved, but you may be assured we take allegations of fraud very seriously and are working to address the concerns you have raised. 

 

We are aware of the findings from the NESCAUM report issued in March. EPA is committed to ensuring that wood stoves and other wood burning devices comply with Clean Air Act standards to reduce health-harming pollution.  In light of information from states and other stakeholders provided in late 2020 and early 2021, the agency is taking a number of actions to address concerns about the certification of wood stoves, including the methods and manner in which wood stoves are being tested for compliance with the 2015 New Source Performance Standards under the Clean Air Act.

 

Numerous brand new, uncertified units,
such as the 1660EFE furnace, are 
frequently for sale by private owners 
near the US Stove factory.

These actions will take time and continued engagement with stakeholders. Given the concerns raised, EPA is carefully reviewing both current and new Certifications of Compliance and will take actions as appropriate.

Postscript: June 8, 2021. US Stove furnaces that do not meet the current, 2020 EPA certification standards continue to pop up for sale around the US Stove factory, that spans the Tennessee/Alabama border. Even while US Stove Company is under scrutiny for various alleged illegal sales, it appears that they may still be trying to get rid of excess inventory of the 1660EFE model furnace. The EPA knows about this but they still apparently do not have the staffing or resources to do anything about it. See many more images and detailers about sellers on our Facebook page.