Gibson Guitar Corp. Settles Lacey Act Violations Charges

On August 6, 2012, the Department of Justice (DOJ) announced that Gibson Guitar Corp. (Gibson) entered into a criminal enforcement agreement with the U.S. resolving a criminal investigation into allegations that the company violated the Lacey Act by illegally purchasing and importing ebony wood from Madagascar and rosewood and ebony from India.

According to the facts of the criminal enforcement agreement, the harvest of ebony in and export of unfinished ebony from, Madagascar has been banned since 2006.

Gibson purchased "fingerboard blanks," consisting of sawn boards of Madagascar ebony, for use in manufacturing guitars. The Madagascar ebony fingerboard 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.  

In 2008, an employee of Gibson participated in a trip to Madagascar, where he was 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. He was also told by trip organizers that instrument parts, such as fingerboard blanks, would be considered unfinished and therefore illegal to export under the 2006 law. Trip 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.    
 
After the Gibson employee returned from Madagascar with this information, he conveyed the information to superiors at Gibson. This information was not further investigated or acted upon prior to Gibson continuing to place orders with its supplier. Gibson received four shipments of Madagascar ebony fingerboard blanks from its supplier between October 2008 and September 2009.

The criminal enforcement agreement defers prosecution for criminal violations of the Lacey Act and requires Gibson to pay a penalty amount of $300,000 and provide a community service payment of $50,000 to the National Fish and Wildlife Foundation. 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.