Gibson to Pay $350,000 Fine in Illegal Wood Case

Nashville-based Gibson Guitar Corp. agreed to pay a $350,000 penalty to resolve criminal charges brought by the US Government and the Department of Justice for illegally importing ebony wood from Madagascar and rosewood and ebony from India.

The agreement defers prosecution under the Lacey Act by requiring Gibson to pay a penalty amount of $300,000 in addition to a community service payment of $50,000 to the National Fish and Wildlife Foundation, which promotes efforts surrounding protected tree species used in the musical instrument industry.

Gibson will implement a compliance program regarding controls and procedures in addition to withdrawing claim to the wood seized for the investigation, total invoice value of $261,844.

“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.

“We felt compelled to settle as the costs of proving our case at trial would have cost millions of dollars and taken a very long time to resolve,” said Gibson CEO, Henry Juszkiewicz. “This allows us to get back to the business of making guitars.”

Juszkiewicz spoke of the prosecution in his July 19 Wall Street Journal piece, which he says cost his company $2-3 million in products and productivity. He called the Government’s actions an “overreach” and a “job killer.”

This case was investigated in part by the U.S. Attorney’s Office for the Middle District of Tennessee.