Gibson changes its tune, settles with Feds

After a protracted and politically charged media campaign protesting its innocence, Gibson Guitar Corp. has entered into a criminal enforcement agreement with federal officials resolving a criminal investigation into allegations that the company violated the Lacey Act by illegally purchasing and importing protected woods from Madagascar and India.

The agreement was announced today by Assistant Attorney General Ignacia Moreno of the Justice Department’s Environment and Natural Resources Division, Middle Tennessee U.S. Attorney Jerry Martin and Dan Ashe, director of the Department of the Interior’s U.S. Fish & Wildlife Service.

The criminal enforcement agreement defers prosecution for criminal violations of the Lacey Act and requires Gibson to pay a $300,000 penalty. 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 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," Moreno said. "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."

As part of the settlement, Gibson also will 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 an invoice value of more than $260,000.

In turn, federal officials said they will not charge Gibson criminally in connection with the company's ordering and handling of ebony from Madagascar and ebony and rosewood from India as long as Gibson meets the terms of the agreement and commits no future violations of law.