Popular craft chain store Hobby Lobby has agreed to pay a $3 million fine and return thousands of artifacts smuggled from Iraq.  Hobby Lobby’s owners are conservative Christians who plan to open a Museum of the Bible in Washington, D.C., this fall.

Federal prosecutors say Hobby Lobby spent over $1.5 million in December 2010 to purchase more than 5,000 Iraqi artifacts from a dealer based in the United Arab Emirates. The sales violated a ban on the sale of Iraqi cultural artifacts in place since 2004.

According to the complaint, Hobby Lobby began collecting a range of historically significant manuscripts and other antiquities in 2009. The following July, Hobby Lobby President Steve Green traveled with a consultant to the United Arab Emirates, where they inspected a large cache of cuneiform tablets and other artifacts.

Two Israeli antiquities dealers and one from the United Arab Emirates attended the July 2010 inspection with Hobby Lobby’s president and consultant. At the meeting, the complaint says, the artifacts were displayed informally, “spread on the floor, arranged in layers on a coffee table, and packed loosely in cardboard boxes, in many instances with little or no protective material between them.”

The dealers claimed the items were from the family collection of a third dealer who was not present, according to the complaint. They later sent Hobby Lobby a provenance statement — a guarantee of authenticity — indicating that the artifacts were legally acquired in the 1960s from local markets.

After returning to the United States, the complaint says, Hobby Lobby’s president and in-house lawyer spoke with an expert on cultural property law who warned them that antiquities from ancient Iraq may have been looted from archaeological sites. In a memo, the expert told them that any items of Iraqi origin that were not properly declared could be seized by customs officials.  Hobby Lobby proceeded with the sale despite the numerous “red flags”, buying hundreds of cuneiform tablets and thousands of other artifacts.  According to a civil complaint filed in the U.S. District Court for the Eastern District of New York, the deal was “was fraught with red flags” and was consistent with a “clandestine” operation.  According to the complaint, Hobby Lobby got conflicting information about where the artifacts had been stored and never met or communicated with the dealer selling them. When it came time to pay, the company wired money to seven separate bank accounts.

A dealer based in the United Arab Emirates shipped packages containing the artifacts to three different corporate addresses in Oklahoma City. Five shipments that were intercepted by federal customs officials bore shipping labels that falsely declared that the artifacts’ country of origin was Turkey.  In September 2011, a package containing about 1,000 clay bullae, an ancient form of inscribed identification, was received by Hobby Lobby from an Israeli dealer and accompanied by a false declaration stating that its country of origin was Israel. The packages bore shipping labels that described their contents as “ceramic tiles,” the complaint said.