Bloomberg News

Gibson Guitar Settles Criminal Claims Over Ebony Wood

August 06, 2012

Gibson Guitar Corp. settled U.S. allegations that it illegally bought protected species’ wood for manufacturing instruments, ending a criminal probe and forfeiture proceedings in federal court in Tennessee.

Gibson, based in Nashville, Tennessee, will pay $350,000 in penalties and agreed to implement a compliance program. The company also will withdraw its claims to about $261,000 of ebony and rosewood from India and Madagascar seized during the investigation, according to a statement today by the U.S. Justice Department.

“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,” Ignacia Moreno, head of the department’s environment and natural resources division, said in the statement.

A raid on the company by U.S. agents in August incensed Tea Party groups and Republican lawmakers such as House Speaker John Boehner, who called it an example of overreaching by big government.

Wearing bulletproof vests, agents from the Justice and Homeland Security Departments sent workers home and seized almost 100 guitars and boxes of raw materials, Chief Executive Officer Henry Juszkiewicz said in an interview last year.

The agents were investigating possible violations of the Lacey Act, enacted in 1900 to curb illicit trafficking in fish and wildlife. The law was expanded in 2008 to make it a crime to import plants and plant products taken illegally.

The so-called criminal enforcement agreement frees Gibson from criminal charges for violations of the Lacey Act as long as the company doesn’t violate the agreement over the next 18 months.

Ed James, a spokesman for Gibson, didn’t immediately respond to a phone call and an e-mail message seeking comment on the settlement.

The forfeiture cases are U.S. v. Ebony Wood in Various Forms, 10-cv-00747; U.S. v. 25 Bundles of Indian Ebony Wood, 11- cv-00913; and U.S. v. Indian Ebony and Rosewood, 12-mc-00014, U.S. District Court, Middle District of Tennessee (Nashville).

To contact the reporter on this story: Tom Schoenberg in Washington at tschoenberg@bloomberg.net.

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net.


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