(CNN) Hobby Lobby agreed to forfeit thousands of artifacts from modern-day Iraq and pay a $3 million fine to resolve a civil action the Justice Department brought against the company, according to court documents.

The DOJ said the company received the falsely labeled artifacts from a United Arab Emirates-based supplier.

The artifacts, ancient cuneiform tablets and clay bullae, were smuggled into the United States through the United Arab Emirates and Israel, Justice officials said. Cuneiform is an ancient system of writing on clay tablets that was used in Mesopotamia, and clay bullae are balls of clay on which seals have been imprinted.

Cuneiform tablet.

The dealers working with Hobby Lobby falsely labeled the shipments as "ceramics" and "samples" and illegally shipped them to Hobby Lobby stores and two corporate offices, according to the DOJ.

Clay Bullae

The arts and crafts chain agreed Wednesday to the settlement with the US Attorney's Office for the Eastern District of New York.

Hobby Lobby said it has cooperated with the investigation.

"In 2009, Hobby Lobby began acquiring a variety of historical Bibles and other artifacts. Developing a collection of historically and religiously important books and artifacts about the Bible is consistent with the company's mission and passion for the Bible," Hobby Lobby said in a statement.

"We should have exercised more oversight and carefully questioned how the acquisitions were handled," Hobby Lobby President Steve Green said in the statement. "Hobby Lobby has cooperated with the government throughout its investigation, and with the announcement of today's settlement agreement, is pleased the matter has been resolved."

Artifacts inspected beforehand

Green and a consultant traveled to the United Arab Emirates in July 2010 to inspect the artifacts for sale, the DOJ said.

"In October 2010, an expert on cultural property law retained by Hobby Lobby warned the company that the acquisition of cultural property likely from Iraq, including cuneiform tablets and cylinder seals, carries a risk that such objects may have been looted from archaeological sites in Iraq," the DOJ said.

"The expert also advised Hobby Lobby to review its collection of antiquities for any objects of Iraqi origin and to verify that their country of origin was properly declared at the time of importation into the United States. "

The expert told Hobby Lobby that a wrong declaration of country of origin could lead to seizure of the artifacts by Customs and Border Protection, according to the DOJ.

'Red flags'

Despite the warnings from the cultural property law expert, Hobby Lobby went forward with a deal to buy 5,548 artifacts for $1.6 million in December 2010, a deal "fraught with red flags," the DOJ said.

"The protection of cultural heritage is a mission that Homeland Security Investigations and its partner US Customs and Border Protection take very seriously as we recognize that while some may put a price on these artifacts, the people of Iraq consider them priceless," said Angel Melendez, special agent in charge, who led the investigation with the United States Attorney's Office.

As a result of the investigation, Hobby Lobby has pledged to set up policies on the buying of cultural property, provide necessary training to its personnel, hire qualified outside customs counsel and customs brokers, and submit quarterly reports to the government on any cultural property it buys for the next eighteen months, according to the DOJ.

Correction: This story has been edited to make clear that Hobby Lobby received falsely labeled artifacts from a supplier, according to the Department of Justice. The UAE-based dealers involved in the transactions falsely labeled the artifacts as "ceramics" and "samples" and illegally shipped them to Hobby Lobby stores and corporate affiliates in the United States, the DOJ said.