Gibson Guitar Corp. Strikes Deal with Justice Dept. to Avoid Prosecution

Gibson Guitar Corp. agreed to settle charges that it illegally purchased and imported ebony wood from Madagascar and rosewood and ebony from India, the Justice Department said today.

The company will pay a $300,000 fine under a criminal enforcement agreement that defers prosecution for criminal violations of the Lacey Act. Another $50,000 fine will go to the National Fish and Wildlife Foundation “to be used to promote the conservation, identification and propagation of protected tree species used in the musical instrument industry and the forests where those species are found.”

Since May 2008, it has been illegal under the Lacey Act to import into the United States plants and plant products that have been harvested and exported in violation of the laws of another country. Raids of Gibson factories by federal authorities led to concerns from some guitar owners that they could also be found in violation and pursued for having instruments made of illegal wood.

Last August, Gibson officials accused the government of “bullying” the company. “Gibson has complied with foreign laws and believes it is innocent of any wrong doing. We will fight aggressively to prove our innocence.”

Under the agreement with the Justice and Interior departments, Gibson will also withdraw its civil claim to retrieve $261,844 worth of Madagascar ebony seized in a raid.

“As a result of this investigation and criminal enforcement agreement, Gibson has acknowledged that it failed to act on information that the Madagascar ebony it was purchasing may have violated laws intended to limit overharvesting and conserve valuable wood species from Madagascar, a country which has been severely impacted by deforestation,” said Assistant Attorney General Moreno. “Gibson has ceased acquisitions of wood species from Madagascar and recognizes its duty under the U.S. Lacey Act to guard against the acquisition of wood of illegal origin by verifying the circumstances of its harvest and export, which is good for American business and American consumers.”

The criminal enforcement agreement includes a detailed statement of facts describing the conduct for which Gibson accepts and acknowledges responsibility.  Gibson received four shipments of Madagascar ebony fingerboard blanks from its supplier between October 2008 and September 2009.