Hobby Lobby Stores has agreed to pay a $3 million fine and hand over thousands of ancient Iraqi artifacts — including clay cuneiform writing tablets — that were smuggled from the Middle East, federal prosecutors said Wednesday.

Oklahoma City-based Hobby Lobby, a popular arts and crafts supplier, bought hundreds of cuneiform tablets and thousands of other artifacts in a $1.6 million deal that “was fraught with red flags” and was consistent with a "clandestine" operation, according to a civil complaint filed in the U.S. District Court for the Eastern District of New York. The packages bore shipping labels that described their contents as “ceramic tiles," the complaint said.

"Cuneiform is an ancient system of writing on clay tablets that was used in ancient Mesopotamia thousands of years ago," prosecutors wrote in the complaint. "These clay tablets are generally not baked or fired and must be handled carefully to avoid damage."

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 complaint alleges that the company was not careful in its procurement of the pieces and its personnel did not speak with the dealer who supposedly owned them.

Prosecutors say Hobby Lobby has agreed to adopt internal policies for importing cultural property and training its personnel.

In a statement posted on Hobby Lobby's news web site, President Steve Green says the company cooperated with the government and “should have exercised more oversight and carefully questioned how the acquisitions were handled.”

Green said Hobby Lobby began acquiring a variety of historical Bibles and other artifacts in 2009.

“Our passion for the Bible continues, and we will do all that we can to support the efforts to conserve items that will help illuminate and enhance our understanding of this Great Book,” Green said.

The company's statement said it had no ill intentions.

"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 wrote. "The goals were to preserve these items for future generations, to provide broad access to scholars and students alike to study them, and to share the collection with the world in public institutions and museums.

It added, "The Company was new to the world of acquiring these items, and did not fully appreciate the complexities of the acquisitions process. This resulted in some regrettable mistakes. The Company imprudently relied on dealers and shippers who, in hindsight, did not understand the correct way to document and ship these items."

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Contributing: Associated Press