Gibson Guitar Settles Federal Case That Resulted in 2011 Armed Raid; Pays $300,000 Fine

In August 2011, Nashville-based Gibson Guitar was raided by federal agents and ultimately charged with violating the Lacey Act, a law that bans importation of rare and endangered plants and wood products. At issue was wood imported from India that would be used for fret boards in the company's world-renowned electric guitars.

As ReasonTV's Anthony Fisher reported at the time:

The feds raided Gibson for using an inappropriate tariff code on wood from India, which is a violation of the anti-trafficking statute known as The Lacey Act. At issue is not whether the wood in question was endangered, but whether the wood was the correct level of thickness and finish before being exported from India. "India is wanting to ensure that raw wood is not exported without some labor content from India," says [Gibson CEO Henry] Juskiewicz.

Andrea Johnson of the Environmental Investigation Agency (EIA) counters that "it's not up to Gibson to decide which laws...they want to respect." She points out that Gibson had previously been raided under The Lacey Act for imports from Madagascar.

Now Gibson has settled with the government. From a Christian Science Monitor account:

Nashville-based Gibson agreed to pay a $300,000 penalty, forfeit claims to about $262,000 worth of wood seized by federal agents and contribute $50,000 to the National Fish and Wildlife Foundation to promote the conservation of protected tree species.

"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,"U.S. Attorney Jerry Martin said in a statement.

"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," CEO Henry Juszkiewicz said in a statement late Monday night.

"This allows us to get back to the business of making guitars," he said, noting that the settlement would allow them to continue sourcing rosewood and ebony from India as it has for decades.

Gibson CEO Henry Juskiewicz became widely known after he reacted to the raid by protesting his company's innocence of running afoul of arcane restrictions (the case here hinged on the degree the wood was finished in India, not whether it was endangered or illegally harvested) in the pages of national newspapers and in Senate hearings held by Sen. Rand Paul (R-Ky.).

Watch ReasonTV's February 2012 video on the story, Anthony Fisher's "The Great Gibson Guitar Raid," by clicking above.

Read Reason's coverage of the case from start to finish.

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  • wef||

    Shakedown successful.

    Protection racket.

  • Drake||

    Nice factory you have there. Be a shame if something unfortunate happened to it.

  • CE||

    Those nice guitars you built? You didn't build those.

  • MisterDamage||

    no no no no! You don't refer to plurals as those, when you're referring to plurals (like roads and bridges) you use _that_

  • Patrick Doland||

    It's worth noting that Taylor guitars handles their ebony sourcing quite a bit differently:

    http://www.youtube.com/watch?v=anCGvfsBoFY

  • Whiterun Guard||

    I can't watch the video, but I assume they launder all their ebony through Mexico or something?

    Also Godwinned!

  • T||

    No, they bought a company in Cameroon so they control the whole supply chain and can fake the documents on the Africa side.

    I kid about the faking on the Africa side, but they did buy into the supply chain on the Africa side.

  • Whiterun Guard||

    It's probably cheaper to just buy the proper stamps in Africa than to fake it. Also Taylor is a German company so they're used to outwitting ridiculously obtuse bureaucratic labyrinths.

  • T||

    Um, what? Taylor is headquartered and based out of El Cajon.

  • sarcasmic||

    Pay millions to prove your innocence, or settle for a few hundred grand.

  • CE||

    that's what the government calls a "win-win".

  • Whiterun Guard||

    This really saddens me. Even though it would play right into government hands, I wish they'd have just paied their debts, fired all of their employees and closed their doors.

  • Tim||

    You been played.

  • Whiterun Guard||

    Like a right-handed Stratocaster strung upside down and picked by a lefty.

  • Ska||

    No Stairway.

  • Copernicus||

    Denied.

  • JW||

    Gibson CEO Henry Juskiewicz became widely known after he reacted to the raid by protesting his company's innocence of running afoul of arcane restrictions (the case here hinged on the degree the wood was finished in India, not whether it was endangered or illegally harvested)

    And exactly *zero* of this very significant, but subtle, distinction will make the national news. All anyone will know is that Gibson Guitars rapes Gaea.

  • Whiterun Guard||

    I wonder if Gojira knows about this.

    The band, not the poster.

  • Ska||

    Most people won't know about this or give a fuck.

  • Fist of Etiquette||

    "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," CEO Henry Juszkiewicz said in a statement late Monday night.

    Yes, but federal prosecutors would also have had to spend millions to try Gibson, and they would have been just as reluctant to waste that money, right? RIGHT?

    Anyway, that's about $350,000 that won't be going to the Romney campaign.

  • The Late P Brooks||

    "Confess your sins, and accept your One True Lord. Repent your heresies before we burn you."

  • BakedPenguin||

    I saw Ted Nugent last night. He only plays Gibsons, and he had several comments about this.

    The whole thing really makes me want to buy a Les Paul Flood Studio in support of Gibson.

  • Ska||

    Those are some really nice looking paint jobs. I have an LP Studio, but I cheaped out on the paint job and it's very plain looking - all black, gold hardware, dot inlays. That swirling pattern looks awesome.

  • BakedPenguin||

    Apparently, after the Nashville flood a few years back, they found these patterns on the floor of one of their paint rooms. They thought they looked cool (I also agree), so they recreated them.

    Unfortunately, it looks like I'd have to get one used, as the limited run is over.

  • ||

    c'mon Nick, at least rip CSM for their ridiculous "Gibson Guitar Corporation admits to importing endangered wood" headline. At least a certain undead commenter did so in the morning links.

  • ||

    Happy birthday, Nick!

  • Loki||

    "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,"U.S. Attorney Jerry Martin said in a statement.

    Depends on your definition of "fair" and "just".

    "[They] keep using that word. I do not think it means what they think it means."

    I wouldn't blame Gibson if they decided to close down their factory here and move to a different country* that doesn't have such shitty arbitrarily enforced laws.

    *No idea what country that would be. They all suck at this point. Maybe they should just go ahead and move to India, since that's where the wood comes from anyway.

  • Apple||

    Gibson can't move overseas, "Made in the USA" is the only thing that allows them to charge $5000 for a '59 reissue Les Paul.

  • sarcasmic||

    Make that $5500 as the cost of the shakedown gets passed to the chump who buys the thing.

  • ||

    and if you want the best buy the fuckin best, if not get cheap fuckin jap version.. apparently you dont play guitar, because you would know the difference. you wernt bitchin in the 50,s when elvis guitar player played one, you werent bitchin in the the 60's when clapton played one, you werent bitchin in the 70';s when frampton played one,, You werent bitchin in the 80's when slash played one, you are all idiots, lets just erase all the music made with a gibson and see what you are left with.... your ipods would be pretty lame

  • The Late P Brooks||

    while allowing Gibson to continue to focus on the business of

    funneling money to the Treasury.

  • MJGreen||

    The National Fish and Wildlife Foundation has got a nice political hook up.

    We seriously ought to start up The Human Fund and find some friends in DC. Any time there's an injustice against humans, those fat cat corporations ought to pay a nice sum to The Human Fund. It's only fair and just.

  • Enjoy Every Sandwich||

    I've never had trouble envisioning a U.S. where I'd have to hide my guns. But I never imagined a U.S. where I'd have to hide my guitars.

    (I don't have any Gibsons, but you never know who will be next.)

  • daveInAustin||

    If the government thinks $300k is fair, then what about all the damage they caused by their armed raids on an American factory? It certainly caused more than $300k of disruption.

  • mr simple||

    It's a good thing the government got those dangerous criminals off the streets. And bless those brave agents who went in with weapons drawn to defend themselves from these thugs.

  • Paul.||

    Deregulation!

  • Mike M.||

    Not just any old hillbilly American town can get wealthy like this, no sirree Bob. You have to have a top-notch education to be able to shake down the working peasants in flyover country this way.

  • Ralph Wylie||

    This begs the question, "What do the Feds do with that precious wood they confiscated?"
    Do they burn it, auction it off or make toothpicks out of it for the imperial Whitehouse and the DOJ?

  • ||

    where is that wood, did they send it back?? prob not. dont get me wrong i wouldnt buy a new gibby, but leave one of the last american institutions alone! wtf

  • Public Citizzen||

    This is So wrong on so many levels.

  • ||

    What the fuck is wrong with you people?????????????????? gibson has been an institution in music since before any of you were born!!!!!!!!!!!!!! les paul 1952 YOu fuckin treee huggin idiots...
    try listening to any of your favorite music without a gibson., probably wont happen. Just keep killin american made products.. china and the rest of the world is waiting for that... thank you current president. thank you george, thomas, ben, wish you were here, you knew what the fuck was up, and wrote the constitution. guess that shit doesnt matter now??????????????????????

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