Gibson Guitar Corp. on Monday entered into a criminal enforcement agreement with the United States to resolve an investigation into allegations that it violated the Lacey Act by illegally purchasing and importing ebony wood from Madagascar and rosewood and ebony from India.
The agreement defers prosecution for criminal violations of the Lacey Act and requires Gibson to pay a $300,000 penalty. It further requires a community service payment of $50,000 to the National Fish and Wildlife Foundation to promote conservation, identification and propagation of protected tree species used in the musical instrument industry and the forests where those species are found.
The Justice Department said Gibson will also implement a program to strengthen its compliance controls and procedures.
In related civil forfeiture actions, Gibson will withdraw its claims to wood seized during the criminal investigation, including Madagascar ebony valued at $261,844.
The U.S. government, in response, will decline charging Gibson criminally in connection with its order, purchase or import 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.
According to the Justice Department, Gibson purchased “fingerboard blanks,” consisting of sawn boards of Madagascar ebony, for use in manufacturing guitars. The blanks were ordered from a supplier who obtained them from an exporter in Madagascar. Gibson’s supplier continued to receive Madagascar ebony fingerboard blanks from its Madagascar exporter after the 2006 ban. The Madagascar exporter did not have authority to export ebony fingerboard blanks after the law issued in Madagascar in 2006, the department said.
Since May 2008, it has been illegal under the Lacey Act to import into the United States plants and plant products (including wood) that have been harvested and exported in violation of the laws of another country. Congress extended the protections of the Lacey Act, the nation’s oldest resource protection law, to these products in an effort to address the environmental and economic impact of illegal logging around the world.
In 2008, a Gibson employee participated in a trip to Madagascar, sponsored by a non-profit organization. Participants on the trip, including the Gibson employee, were told that a law passed in 2006 in Madagascar banned the harvest of ebony and the export of any ebony products that were not in finished form. They were further told by trip organizers that instrument parts, such as fingerboard blanks, would be considered unfinished and therefore illegal to export under the 2006 law. Participants also visited the facility of the exporter in Madagascar, from which Gibson’s supplier sourced its Madagascar ebony, and were informed that the wood at the facility was under seizure at that time and could not be moved.
The Justice Department noted that after the Gibson employee returned from Madagascar, he conveyed the information to superiors and others at Gibson. The information was not acted upon by Gibson. The guitar maker then received four shipments of Madagascar ebony fingerboard blanks from its supplier between October 2008 and September 2009, the department said.
“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 Ignacia S. 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 agreement is fair and just in that it assesses serious penalties for Gibson’s behavior while allowing Gibson to continue to focus on the business of making guitars,” added U.S. Attorney Jerry Martin.