Skip to comments.Gibson Guitar Corp. Strikes Deal with Justice Dept. to Avoid Prosecution
Posted on 08/06/2012 10:38:28 AM PDT by kingattax
Gibson Guitar Corp. agreed to settle charges that it illegally purchased and imported ebony wood from Madagascar and rosewood and ebony from India, the Justice Department said today.
The company will pay a $300,000 fine under a criminal enforcement agreement that defers prosecution for criminal violations of the Lacey Act. Another $50,000 fine will go 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.
Since May 2008, it has been illegal under the Lacey Act to import into the United States plants and plant products that have been harvested and exported in violation of the laws of another country. Raids of Gibson factories by federal authorities led to concerns from some guitar owners that they could also be found in violation and pursued for having instruments made of illegal wood.
Last August, Gibson officials accused the government of bullying the company. Gibson has complied with foreign laws and believes it is innocent of any wrong doing. We will fight aggressively to prove our innocence.
Under the agreement with the Justice and Interior departments, Gibson will also withdraw its civil claim to retrieve $261,844 worth of Madagascar ebony seized in a raid.
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. 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 criminal enforcement agreement includes a detailed statement of facts describing the conduct for which Gibson accepts and acknowledges responsibility. Gibson received four shipments of Madagascar ebony fingerboard blanks from its supplier between October 2008 and September 2009.
More underhanded Big Government extortion to fund socialist wealth redistribution.
They use any pretense at all to control, tax, extort.
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Meanwhile, the more they drive companies out of business, the less funding they’ll get. It’s like they’re possessed with a zeal to destroy this country as strong as the zeal that possesses the Iranian Twelver elite to destroy the planet . . .
Nothing more than armed robbery by government.
Eat more chicken, buy another Gibson.
Overzealous, regulatory overreach.
DOJ and Musical Instrument maker reach a chord?
An horrific act of extortion by the Government.
It’s like those show trials in Mao’s China where people were forced to incriminate themselves - except that today’s Maoists also insist on extracting about half a billion dollars in tribute (I’m including the cost of the wood here).
(gasp) Does this make ME a criminal???
Gibson knows it is cheaper to pay the bribe than to fight them in court.
Government intimidation and extortion. Gibson had purchaced the wood in question long before it became illegal to purchace the Brazilian rosewood. There was no mandate to return purchaced wood. Martin was not attacked because the Martin owners ponied up money to the obama candidacy. Gibson was extorted. They paid the fine just to stop the legal fees from bleeding them into backrupcy.
An ethical and honest journalist (there aren’t any anymore, I’m afraid) would find out the principals in the company and find out what they’ve been forced to contribute [voluntarily] to Obama’s Re-election campaign.
We all know there aren’t any real journalists left so this episode in Americana Musicality will remain a mystery, I guess.
You need to re-do that graphic, and label every guitar an “AK-47”.
So... what happens to that wood now?
If anyone doesn’t despise the central socialist government raise your hand!
I have a Les Paul Custom, 1980 vintage.
Gets burned and the heat wasted so it's never used?
Gibson doesn't have the best reputation in town for treating it's employees right. So it's possible Gibson was knowingly violating the law.
"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"
Gibson gave up the consficated inventory, and paid a fine rather than continue to fight? Why? What information did the government have?
I bought the SG brand new in '73 for $325.00. : )
“The company will pay a $300,000 fine under a criminal enforcement agreement that defers prosecution for criminal violations of the Lacey Act. Another $50,000 fine will go 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.
That’s a lotta Les Pauls, at $1K profit (probably overstating it) = 3500 guitars. And...if the evil wood is ebony, only a very few upper-end Gibson models use ebony (most use rosewood) fretboards. LP Custom, SG Custom (LP Customs only, not the LP Standards or the majority of the various down-line LP models) L-5, Super-400, not that many others)
I like how $50K goes to the NATIONAL Fish & Wildlife Foundation...as if one freaking splinter of ebony came from the US. A nice little piece of extortion. Unfortunately, the reverse protest on this issue is gonna be a little pricier than Chick-Fil-A.
I wonder about the size of the penalty relative to the corpus of the alleged violation. By that, I mean both the 2009 and the 2011 seizures amounted to something under $1 million worth of wood. (That number is entirely from memory) A bank committing money laundering, such as Wachovia and HSBC, probably pays a penalty of between 5 and 10% of the total proceeds of their crime for which they pay a penalty “without admitting guilt”. In the case of Wachovia and HSBC, the case is closed. Yet in the case of Gibson, the article says prosecution is DEFERRED in exchange for Gibson paying ONE THIRD the corpus of the violation. Deferred = delayed. Huh? You mean, the DOJ can pull this out of its hat again at some unknown future time?
The Federal Government did not get rid of organized crime, they just replaced it with themselves. This is political extortion, plain and simple.
Where in the story was the part about Madagascar persuing Gibson via our regulatory agencies for Gibson’s illegal purchase of their forest products?
Wondering how our government can justify going after Gibson without a complaint filed by Madagascar to initiate such action.
Perhaps there is another participant in this tyranny behind the scenes sticking their nose into the business of sovereign Nations, and private enterprise.
The whole thing stinks of U.N.
Pretty much, otherwise they're cowards willing to surrender over $600K to Mordor rather than fight for what's right.
Wow. $350K for nothing. Guess it would have been cheaper to give $50K to the Obama election campaign.
Next time they’ll pay up front.
In the original complaint they were going after Gibson for Indian wood taken against Indian law. Except that the Indian government was OK with the procedures in place and had no complaint.
It sounds like Madagascar similarly had no complaint with Gibson. Which means they are accused of non-crimes and the price of not being bankrupted is to offer a soviet-style confession to this non-crime.
It'll all go to China, where they will make counterfeit Gibson guitars.
What a moronic law. There are literally millions of laws around this globe, and we have to know about the detailed ins and outs of every legal system throughout the world, or we are criminals?
Our Congress is the biggest band of idiots and our second greatest embarrassment after the inimitably idiotic Kenyan Clown.
I just got a new Gebson Les Paul on Wednesday,
so I think I’ll hold off a bit before my next purchase.
But it was a good thought.
This stinks. Not only do they have to pay huge fines, they lose nearly $300k of wood.
Sadly that is the case. I wish they had stood their ground.
So....what happens to the impounded ebony? My guess...burned or sold to some leftist company...Martin? I’m going with burned.
“gasp) Does this make ME a criminal???”
No, the fact you don’t kiss liberal butt and vote for Obama makes you a criminal. Welcome to the club.
I own a nice Gibson Sonix built back in the early 80s. It’s a great guitar.
We don’t need no more stinkin’ taxes, just sue the crap out of all the evil oil companies; power companies; big banks; coal companies, and now the small woodworking companies!
I wish they would have stood and fought. When faced with this sort of pressure, companies usually cave.
Kudos to Chick Fil-A for standing firm.
A company that employs people has to tread lightly. The correct action of a company is to settle - unless each and every employee volunteers to risk their job and their paycheck in an unfair fight with the government. It would be unwise anyway to fight an opponent on a battlefield that the opponent selected, at the time of opponent's choosing. A $600K will look very attractive after a judge hits them with a $60M fine. Company's management is there to avoid that unfortunate situation. It does not even matter if there was or there wasn't any wrongdoing on company's part - not any more than medical help to injured motorists depends on who was at fault.
If the Obama's regime stays in power for another 4 (?) years then one possible response would be to move the entire company abroad, with every single employee relocated. There are many countries in the world (nearly all of them) that have better business climate; life there will cost less, so in the end the employees will be richer.
Nice SG! Keep it good and under no circumstances lend it to friends/relatives, LOL!
When I played electric in the 60s-70s I bought a brand new Mosrite Ventures. Wonderful but high maintenence guitar. Then I went all acoustic and after marriage pput it all away.
Decades later I let my then teenaged oldest son use the Mosrite. Dented, buckle rash...I finally sold it to a collector who was extremelly happy for paying $2000 even in less than pristene condition.
Right now I have 2 Silvertone acoustics, one is laminated the other is real wood. Both sound great after I set them up and I paid less than $100 total.
Also have a real tele and a strat copy. They are OK but like I said I am into acoustc fingerstyle.
I’d love to get a Gibsom Hummingbird or Songwriter. The Seagull guitars from Canada are also interesting.
I’d also like to try an archtop like a Gibson 335 or Epi copy.
Fender, Martin, Ibanez, and others all use rosewood, and probably ebony too.
But the gub’mint only went after Gibson.
Shame if anything happened to it.
I have two friends with 335s, and I am jealous of both of them. And they are jealous of each other, which makes it more funny.
Gibson Guitar Corp. Strikes Deal with Justice Dept. to Avoid Prosecution
My daughter has a Hummingbird, which we purchased for her, and she just won a really nice 1961 SG reissue. Both gorgeous American guitars. I can’t wait until November to get the Obama crooks out of the way.
I have more FUN with my cheap Silvertones than I ever had with an expensive guitar! After I set them up they play and sound great even the laminated cheapie I bought for $6!
In fact the laminated has a nice mellow, smooth tone using 11-52 IIRC Pearse or Martin strings.
It’s funny when some of my old band gets togethet and we compare. They are jealous of how good mine sound compared to their $500+++
It’s all in the setup and knowing what you are playing.
I am jealous of the accomplished luthiers!
Really if you think about it a lot of the “classic” acoustic sound was done on fairly inexpensive guitars.
BTW my first electric was a DanoElectric made of Masonite with the amp in the case! The action was horrendous! Wish I had one now. Real ones go for big bucks! They sound cool!
Makes you wonder if there were strings attached...
Not just anybody can make bad puns about guitars. I requires some pluck.
The Government has unlimited resources, the courts on their side , and lawyers on the payroll who just sit around all day slapping their chicken.
I wish Gibson could have taken them on too, but sometimes you just can’t win and you pay up.
The government knew that when they went in and stole their wood and ripped them off.