Magazine \ Daily News \ Gibson and the U.S. Department of Justice Reach Settlement Agreement on Lacey Act Violations

Gibson and the U.S. Department of Justice Reach Settlement Agreement on Lacey Act Violations

Gibson will pay a penalty of $300,000 as well as a community service payment of $50,000 to the National Fish and Wildlife Foundation.


A 2012 Gibson USA SG Standard Limited with baked maple fretboard.

Washington, DC (August 6, 2012) -- The U.S. Department of Justice's Office of Public Affairs announced today that Gibson has entered into an agreement to resolve the investigation into alleged Lacey Act violations regarding the company's purchase and import of ebony and rosewood.

This morning's DOJ press release provided details of the settlement:

"The criminal enforcement agreement defers prosecution for criminal violations of the Lacey Act and requires Gibson to pay a penalty amount of $300,000. The agreement further provides for a community service payment of $50,000 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. Gibson will also implement a compliance program designed to strengthen its compliance controls and procedures. In related civil forfeiture actions, Gibson will withdraw its claims to the wood seized in the course of the criminal investigation, including Madagascar ebony from shipments with a total invoice value of $261,844.

"In light of Gibson’s acknowledgement of its conduct, its duties under the Lacey Act, and its promised cooperation and remedial actions, the government will decline charging Gibson criminally in connection with Gibson’s order, purchase, or importation of ebony from Madagascar and ebony and rosewood from India, provided that Gibson fully carries out its obligations under the agreement, and commits no future violations of law, including Lacey Act violations."

The settlement resolves two separate incidents that involved high-profile raids of Gibson's Nashville and Memphis facilities in 2009 and again in 2011. In question was ebony from Madagascar and rosewood from India, which Gibson had allegedly purposefully imported illegally, violating a 2008 amendment to the Lacey Act, which regulates the trade of endangered plants.

Gibson CEO Henry Juszkiewicz had vehemently denied wrongdoing throughout the yearlong investigation, with the company rallying support via television and radio appearances as well as social media. He said in an August 2011 press conference, "We feel totally abused. We believe the arrogance of federal power is impacting me personally, our company personally, and the employees in Tennessee—and it’s just plain wrong."

In the months following the raid, Gibson ramped-up its use of alternative fretboard woods, including granadillo on the 2012 Les Paul Studio, and baked maple on a number of guitars, including the Les Paul Classic Plus, SG Standard Limited, and Melody Maker.

For more information:
U.S. Department of Justice
Gibson


     

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Comments

 (36 comments) display by
UsernameComment
Mr. X
on 11/12/2012 		Has nothing to do with Obama.
BennyB
on 08/30/2012 		I still don't buy it, but they have to work. It's a fine example of what Obama has in store for the whole country, should he be re-elected. They had to do something to get things rolling again. It's just sad that the Government has to go around looking for this kind of thing. I wonder who's going to get the wood. Or will it be burned? I wouldn't put that past them, either. Gibson can't have it, and they don't want to store it. I'd bet a nickel on that. Thugs with power.
Mike
on 08/24/2012 		First, it is VERY likely that Gibson settled in order to avoid high legal fees. My wife's company does fire/water/mold/haz mat disaster clean up and restoration, and was approached by the DC Taxation Division because they owed taxes to them BASED ON JANITORIAL TAX SCHEDULES! Her company had been paying on the emergency service tax schedule (because that's what they are!!!!) and according to DC, owed $500k+. After $100k+ in lawyer fees, the DC Tax Div settled on $90k as the penalty, AND AGREED THAT THE COMPANY WAS PAYING THE PROPER SCHEDULE TO BEGIN WITH! The State of Maryland showed up 2 weeks later with the same suit, and offered a similar settlement figure before they left the first meeting. The government needs more tax revenue because the economy is down; wake up everybody! Lucas, who said the rest of the world is correct? Last time I checked, the USA was still the greatest place on earth.
Tony T
on 08/17/2012 		They smuggled contraband into the U.S. and got off easy. They have'nt put out a decent guitar since the mid-nineties.
bluefade
on 08/11/2012 		GIBSON'S board of directors should FIRE the CEO of the company!!! The guy is getting a full dose of what he tried to lay on PRS!!! If he's allowed to keep it up,he'll end up KILLING GIBSON!!! That would be a shame,as thier products have always been one of the finest in the industry!!!
NoOneYouKnow
on 08/09/2012 		From Gibson's press release: The statement of facts includes Gibson's official acknowledgement that (Gibson) could have and should have exercised greater due diligence in regard to the importation of the questionable wood from Madagascar. Doesn't this amount to an admission that the company violated the law, notwithstanding all your previous protests? A.4. Gibson is strenuously dedicated to continuous environmental improvement. We want to be leaders in our business, and our business includes protecting the environment. We can always do better. Yeah, they got caught. Gibson/Juszkiewicz's claim that it would have cost "millions" to defend Gibson sounds like BS too--they either had the paperwork or they didn't. Another black eye for Gibson.
dho3
on 08/09/2012 		the lacey is to protect foreign countries from being run over and raided...by the likes of our guitar, furniture, home constructions, need for exotic woods. the likes of monsanto.
FairAndBalan ced
on 08/09/2012 		Hey Keith, I think you missed something! "In related civil forfeiture actions, Gibson will withdraw its claims to the wood seized in the course of the criminal investigation, including Madagascar ebony from shipments with a total invoice value of $261,844." It's more like- if they were so innocent all along why didn't they put up a fight and clear their good name? Other guitar manufacturers have managed to live within the rules, and Gibson can too. I am a huge (vintage) Gibson fan- I own close to 15 vintage Gibsons, but I will never buy a new one as long it is run by this fool. Anyone who goes on the sort of public politically divisive tirade Henry Juszkiewicz did should not be running a public company, although this is far from his only offense. It doesn't take much time on Google to find legions of current and former employees who think the direction of the company is wrong and antics of this egomaniac are running the company into the ground and diluting a classic brand.
Mark Lacey
on 08/09/2012 		Gibson at the moment cannot import rosewood and ebony that is thick enough to make a fingerboard as per the laws of India so they are having to laminate two thinner pieces together which means more waste from the saw blade. This does not save trees. Ultimately, every one will have to use alternative materials Also no one is talking about the problem of exporting guitars that have any shell inlays. As a custom luthier, I have to apply for a permit and then ship the instrument out of state for inspection which adds my costs. Meanwhile, the market is flooded with cheaper imports that use the same materials. I'm not going to comment on the whole Gibson saga or the politics but I did joke with George Gruhn that he, Henry and myself should start a band and call it "The Lacey Act" (I'm not related in any way).
Jake
on 08/09/2012 		Suggest that Gibson move their operations out of the US and not have to worry about the political BS.



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