Business

Feds Drop Case After Gibson Guitars Agrees to Pay $300K Penalty

Feds Drop Case After Gibson Guitars Agrees to Pay $300K PenaltyFederal prosecutors say a deal has been reached to drop the criminal case against Gibson Guitar Corp. after the instrument maker agreed to pay a $300,000 penalty for allegedly purchasing and illegally importing ebony wood from Madagascar and rosewood and ebony from India, the Wall Street Journal’s Saabira Chaudhuri reports.

“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 Ignacia S. Moreno, assistant attorney general for the Justice Department’s Environment and Natural Resources Division.

The company also agreed to forfeit claims to about $262,000 worth of wood seized by federal agents and contribute $50,000 to promote conservation of protected tree species.

$50K “to promote conservation” of trees? At what point can this be called a shakedown?

Federal agents, as you may recall, first raided Gibson factories back in November 2009.

“The government focused on a March 2009 shipment of ebony from Madagascar intended for guitar fingerboards. Madagascar law bars the export of certain unfinished wood products, according to both Gibson and the government,” the Wall Street Journal reports.

“Gibson had said that the ebony had been cut into pieces and that local officials approved the export as a legal sale of finished goods. After the 2009 raid, Gibson stopped buying wood from Madagascar but continued to use suppliers in India for ebony and rosewood,” the report adds.

Gibson was raided two more times in August 2011.

“[F]federal agents [claim] ebony exported from India to Gibson was ‘fraudulently’ labeled to conceal a contravention of Indian export law,” the Journal reports.

Gibson CEO Henry Juszkiewicz said in an interview with the Journal last year that a broker may have made a mistake in “labeling the goods” but that the “sale was legal and approved by Indian authorities.”

Final thought: With unemployment at 8.3 percent, the cost of energy rising, a quickly approaching “fiscal cliff,” and over three years without a budget from the Senate, we’re really, truly happy that the administration can find time to go after Gibson for allegedly importing illegal wood.

Follow Becket Adams (@BecketAdams) on Twitter

The Associated Press contributed to this report.

Comments (154)

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  • yosemitefan
    Posted on August 6, 2012 at 7:22pm

    Talk about a shakedown…was this Revverrend Jesse Jackson running this OP or was it the Kenyan Emperor Pro-tem handiwork?

    Report Post »  
    • John 1776
      Posted on August 6, 2012 at 7:36pm

      Talk about a case ending Bss-Aacward !
      It should be the DOJ held in contempt of the American public for demanding the jobs go to India instead of production in the US! Lord Barry gets his way, further destroying yet another American company !!

      Report Post » John 1776  
    • Force2bewreckin
      Posted on August 6, 2012 at 7:36pm

      This is Extortion.

      Report Post »  
    • gman2
      Posted on August 6, 2012 at 7:54pm

      President Zero has always been a poser.

      Report Post »  
    • MeteoricLimbo
      Posted on August 6, 2012 at 8:31pm

      Sounds like a great time to spike i a few rosewood and ebony saplings ….It would be interesting to see where the 50k actually goes..

      Report Post » MeteoricLimbo  
    • Bill
      Posted on August 6, 2012 at 8:35pm

      This is EXTORTION!

      Report Post » Bill  
    • TRUTHandFREEDOM
      Posted on August 6, 2012 at 9:01pm

      Something really stinks here. I don’t remember actual charges being pressed. I just remember that there were 2 raids (2009 and 2011) and that wood was confiscated. Gibson was told that if they’d have had the wood work done in madagascar that there would be no problem, but since Gibson is an American company with an “American made” product, that outsourcing was a non starter. Of course, the Lacey Act is just one more piece of legislation that is a boot upon the necks of American businesses.

      Report Post »  
    • marybethelizabeth
      Posted on August 6, 2012 at 9:54pm

      They are lucky to have stayed out of jail.

      A criminal penalty of $50,000 seems too little to me for reckless disregard of our nation’s laws.

      Report Post » marybethelizabeth  
    • Walkabout
      Posted on August 6, 2012 at 10:05pm

      marybethelizabeth

      Really Mary? They could get the same wood from the same country if it had been machined a little bit by someone, anyone in the country of export.

      They did not admit guilt. They saw they couldn’t outlast a Democrat administration backed by government resources until the election & could not take the chance that they would be re-elected.

      Under the law enacted by delusional people like yourself id the supplier from India had drilled a hole in the wood or shaped with a saw, it would have been legal. So either way the supposedly endangered tree get cut down. So is it really endangered? Or do you really elected politicians to enact such laws to feel good about yourself. If that is the case you need to see a psychiatrist!

      Report Post »  
    • banjarmon
      Posted on August 7, 2012 at 1:59am

      SHAKEDOWN…..Is that Beck’s name on the guitar???

      Report Post » banjarmon  
    • HKS
      Posted on August 7, 2012 at 7:01am

      That will teach them not to let your competition out donate you to liberals.

      Report Post » HKS  
    • johnjamison
      Posted on August 7, 2012 at 7:59am

      This is a huge sign that the federal government is the enemy of the U.S. BUSINESS AND U.S. CITIZENS.Time to flush the turd that is Washington and rid us of the evil we allowed it to become

      Report Post »  
    • objectivetruth
      Posted on August 7, 2012 at 9:32am

      There is more to it I believe.Muslims hate music and will go after all musicians and instrument makers.I truly believe one of thiers is behind this.Please read the following
      https://en.wikipedia.org/wiki/Islam_in_Madagascar
      http://www.30-days.net/muslims/muslims-in/africa-southern/madagascar/
      This is about their belief or lack thereof in music.
      http://muslimways.com/library/miscellaneous/music/why-music-is-haram.html
      http://www.rottengods.com/2008/02/why-music-is-forbidden-in-islam.html

      Report Post »  
    • Detroit paperboy
      Posted on August 7, 2012 at 10:35am

      @homely maryelizabeth……….and what about the immigration laws, and gun running laws……oh, I thought so….idiot.

      Report Post »  
    • happygranny
      Posted on August 7, 2012 at 11:27am

      Our government is the criminal here and not the Gibson guitar folks. Extortion, pure and simple.

      Report Post »  
    • garylee123
      Posted on August 7, 2012 at 1:45pm

      @ Mary
      And how many of the gov’ts 14 million laws did you violate today?

      Report Post »  
    • bobdog19006
      Posted on August 7, 2012 at 6:28pm

      I do think the DOJ was out of line requiring Gibson to make the check payable to the Obama Reelection Camplaign.

      Report Post » bobdog19006  
    • babylonvi
      Posted on August 7, 2012 at 6:45pm

      MARYELIZABETH, you are either an uninformed, uneducated , clueless DOLT or you are a Progressive-Globalist Troll. A $100,000 contribution to the ‘Committee to re-elect’ and all this would never have happened.

      Report Post » babylonvi  
  • ObserverOnTheHill
    Posted on August 6, 2012 at 7:21pm

    It’s not enough we all ( well, 50% of us anyway ) get shaken down every April 15, now I see penalties as a revenue “enhancer”

    Report Post »  
    • DSTSS2010
      Posted on August 6, 2012 at 10:53pm

      “Mo money” for the Obama campaign! Holder has transferred the money already.

      Report Post » DSTSS2010  
  • qpwillie
    Posted on August 6, 2012 at 7:19pm

    Do any of you other pickers feel the ire it makes me feel to see his evil hands on that Gibson?

    Report Post » qpwillie  
    • poorrichard09
      Posted on August 6, 2012 at 7:24pm

      Extortion by the gov’t-it’s the Chicago way. Yeah, 0dumb@ss holding that beautiful “ax” makes me wanna puke.

      Report Post »  
    • Smokey_Bojangles
      Posted on August 6, 2012 at 7:35pm

      I feel rather violent sickness over it.

      Report Post » Smokey_Bojangles  
    • nowonuno
      Posted on August 6, 2012 at 8:01pm

      Well said. The way he’s holding it…looks like he’s played with it for years. Oh yeah, and the Gibson too.

      Report Post »  
    • Rational Man
      Posted on August 6, 2012 at 8:17pm

      Almost as much as that jerk having his hands in my pocket!!

      Report Post » Rational Man  
    • VoteJoel
      Posted on August 6, 2012 at 9:19pm

      Yes, first thing I noticed. I’ll be glad when the jerk is gone.

      Report Post » VoteJoel  
    • teebubba
      Posted on August 6, 2012 at 10:44pm

      Oh..Obama is the biggest hypocrite. No one remembers that the official “Presidential gift” to Mrs. Sarkozy from Barrack and Michelle was a Gibson Custom Shop L-5 guitar.
      This is really about the fact that Gibson’s biggest quality competitor is the Martin Guitar Co of Nazarath, PA which has the same kinds of imported wood problems but is a “union shop” which Gibson is not.

      Report Post » teebubba  
    • SCREW-WINDOWS
      Posted on August 6, 2012 at 11:48pm

      Is that a socialist guitar he’s holding ?

      Report Post » SCREW-WINDOWS  
    • Gonzo
      Posted on August 7, 2012 at 10:00am

      Yes it does. That buffoon has no idea of the heritage behind the Gibson Les Paul and couldn’t care less. When Les mounted a pickup to that slab of wood, he did it himself. The government had nothing to do with it and look at the industry he created by doing it! Les Paul was a great American.

      Report Post » Gonzo  
    • HorseDancer
      Posted on August 7, 2012 at 10:34am

      GONZO . . .Yes! Thank god for another guitar historian. Me too! Here’s a cool fact. Gibson is coming out with a new signature guitar based on the ES 335. Yeah. Know who it’s for? That’s right, THE NUGE!!!! Here’s the skinny. It’s got only one string. Seems that’s all you need to play all of his songs. But what a string it is! Combo brass and nickel, poly coated with an embedded zebra stripe. It’s VERRRRRRRRY cool. OK, see ya, brother!

      Report Post »  
  • Nanaswords
    Posted on August 6, 2012 at 7:19pm

    Can we all say/see authoratative blackmail in this situation !!! More dollars for this administrations payroll to the increased irs employees and all the parties/bonuses…etc. etc. etc. I have promised my Grandson a new guitar…Guess what brand I will be purchasing for him !!! It isn’t a guitar situation here… it is free market…American-made company !!! Does the tree-huggers plan on planting more trees in madagascar? Isn’t that an island in the Indian ocean…off Africa ? What is the political situation there ?

    Report Post »  
  • IMCHRISTIAN
    Posted on August 6, 2012 at 7:19pm

    Human beings are nothing to this administration but the wood, beetles, turtles that need crossings, etc they do worship but could careless about all the birds they are slashing with expensive windmills. How much fuel have they used for personal use all these years. When they face God someday it will be a lot harder to lie and extort.

    Report Post »  
  • Goldi
    Posted on August 6, 2012 at 7:18pm

    The $3K wil go directly into the obama reelection committee or ACORN!

    Report Post »  
    • chips1
      Posted on August 6, 2012 at 8:26pm

      It sounds like the old shell game. What nut has the money?

      Report Post »  
  • Archstone
    Posted on August 6, 2012 at 7:17pm

    How much did ACORN get?

    Report Post »  
    • VanceUppercut
      Posted on August 7, 2012 at 9:46pm

      ACORN doesn’t exist anymore. I guess your “patriot” media like theblaze and Fox News never got around to telling you that.

      Report Post »  
  • michael7695
    Posted on August 6, 2012 at 7:17pm

    The only reason why Gibson is getting hassled is because they are non-union and believe in a free market system. The tree thing is just an excuse.

    Report Post »  
  • skippy6
    Posted on August 6, 2012 at 7:16pm

    So it was a legal sale…..And how was Gibson supposed to know it was illegal wood?? Has any artist stood for Gibson on this issue???

    Report Post » skippy6  
    • pudssweetie
      Posted on August 6, 2012 at 8:04pm

      Skippy, it wasn’t illegal until our Federal Government said it was, Gibson has for many years purchased the Ebony from Madagascar and have never had a problem and knew the rules on purchasing the Ebony. What it all boils down too, is that Gibson is a Non-Union business and donates money to Republicans. What is also funny is the fact that Fender also uses the same Ebony from Madagascar yet the Federal Government looked away, probably due to the fact the Fender in a Union shop and donates heavily to the Democrats. Ted Nugent and other artists were upset with the raid and were even more upset when the Feds threatened to raid one of Nugent’s concerts and confiscate all of his Gibson Guitars(the only kind he uses) but you didn’t hear it from the MSM.

      Report Post »  
    • CitizenCindy
      Posted on August 6, 2012 at 9:04pm

      @pudssweetie – Excellent summation.

      Report Post »  
  • PhineasJWhoopee
    Posted on August 6, 2012 at 7:11pm

    We need some Untouchables to wipe out the corrupt mobsters in the DOJ from extorting redistribution money from law abiding American companies.

    Report Post » PhineasJWhoopee  
  • taxpro4u03
    Posted on August 6, 2012 at 7:06pm

    This ‘story’ doesn‘t make ’sense…’ for a couple reasons — they ‘settled’ to keep the doors ‘open,’ untold numbers employed to continue to produce a quality product wherre demand remains high– “cost-effective risk/benefit” analysis — this isn‘t about ’justice,‘ nor ’international ‘law’ — this is about “crucifying” an American Company as ‘an example.‘ what’s next – harley-davidson cuz we ‘know’ how bad-azz those redneck tea party bikers are…Especially the Patriot Riders who maintain a vigil to keep the likes of Wesboro hate-mongers at bay during the solomnest of occassions — I fail to accept there are NO ‘out-of-work‘ attorney’s who wouldn’t take this pro-bono on principle — at bar — . Will Cain too busy making the ‘lame-stream’ circuit to thro a lil heads-up their way? — remember — Jefferson Davis was pardoned by Andrew Johnson in the 11th hour of his treason case being heard before then chief Justice Sam P Chase on PRINCIPLE…. Must be about the money… :-/

    Report Post »  
    • 1947
      Posted on August 6, 2012 at 7:14pm

      Now watch Obama will start going to businesses build by individuals and employees with some outlaw fine placed on the business to get MONEY for his four more years……. Again America just another way to TAKE your MONEY for his gain

      Report Post »  
    • MAX0O1
      Posted on August 6, 2012 at 8:43pm

      MY DEAR THIS is about power and retribution!

      Report Post »  
  • Arizona Don
    Posted on August 6, 2012 at 6:58pm

    This is the most corrupt DOJ there has ever been or will probably ever be. Chicago style politics. Has the federal government ever sued so many states and companies? Doubtful I suspect. Who exactly is watching this bunch of thieves and lairs? Anyone? Doesn’t look like congress is and we know for sure the Senate isn’t. The house is so overwhelmed they cannot possibly check on everything in question. Overwhelmed, lets see now, that was the cloward & piven plan wasn’t it?

    Report Post » Arizona Don  
    • Jenny Lind
      Posted on August 6, 2012 at 7:02pm

      I cannot wait until they get their pink slips from a new administration.

      Report Post »  
    • 82dAirborne
      Posted on August 6, 2012 at 7:07pm

      “This is the most corrupt DOJ there has ever been or will probably ever be.”
      What do you think it would be like if the Obamunist gets another four years? It would make the current D.O.J. look like the Boy Scouts!

      Report Post » 82dAirborne  
    • taxpro4u03
      Posted on August 6, 2012 at 7:12pm

      Hale v Henkel 201 U.S. 43 @ 89 (1906) — Read it — Know it…. Live it…. Lawyers cannot do it FOR you — (see Erie RR v Tomkins) — ‘Law’ ain‘t that ’tough’ if you know where the blows are coming from…. get to the SOURCE — then it’s not so convoluted. Win some lose some — roll the dice and takes your chances…HONORABLY.

      Report Post »  
  • avidfanofavid
    Posted on August 6, 2012 at 6:58pm

    Gibson what are you doing? I understand that having this case proceed on indefinitely is a burden and you are probably saving money by just paying the money but you are empowering the regime. Now they know that they can clap you around and you will eventually bend. Punch the bully in the face once and you’ll never be bullied again.

    Report Post »  
    • rcw_68
      Posted on August 6, 2012 at 7:28pm

      That is exactly what I was thinking. That picture with obama holding the guitar sickens me, and,,,,they’re gonna let all that wood go to waste. You know…for a progressive (oppresive) liberal, environmental wackjobs, these people are the most destructioive and wasteful bunch I have ever seen.

      Report Post »  
    • pharmacognosist
      Posted on August 6, 2012 at 8:11pm

      The fine is moot.. The chances are good that he will not have to pay it. The wood is another thing. The government can use it like they use drugs. A perpetual gold mine. No telling how many times they can sell it, confiscate it, sell it again. Lawyer fees, court costs, fines. What a Chicago racket.

      Report Post »  
    • Rational Man
      Posted on August 6, 2012 at 8:24pm

      The wood will probably go to Martin Guitars. They are Democrat donors. That is also the reason why they didn’t get slapped for using the same wood, from the same place, and approved by the same officials in India. Cronyism at it’s ugliest…………….

      Report Post » Rational Man  
  • Individualism
    Posted on August 6, 2012 at 6:57pm

    they just got Microsoft-ed and now if they don’t donate to political parties they will be targeted against like Microsoft. also gotta love the ex military federal agents that said sir yes sir and did their dirty work to. that is anyone who runs will likely get money from them.

    Report Post » Individualism  
  • LeadNotFollow
    Posted on August 6, 2012 at 6:57pm

    …
    Once again, the Government robs a business owner.
    Why didn’t the Government focus on the deforestation of the Rainforests, that had been done by big name fast food joints, for many years? Look it up for yourself.

    Report Post »  
  • jerryod1627
    Posted on August 6, 2012 at 6:57pm

    If the American people are stupid enough to elect obama again this incident will be minor compared to what he will do to any business or any person that is successful after he becomes out dictator!

    Report Post »  
  • CatherineAnn
    Posted on August 6, 2012 at 6:56pm

    They were squeezed and couldn’t take it any more. Sorry America but you voted for this dictator and everyone will be negatively affected if he gets 4 more years.

    Report Post » CatherineAnn  
    • bannedfromCNN
      Posted on August 6, 2012 at 7:52pm

      To paraphrase Soetoro’s “mentor”, Jeremiah Wright, “G-D- Obama. Come November, your chickens will come home to roost. You been ridin’ dirty, boy.”

      Report Post » bannedfromCNN  
  • Snowleopard {gallery of cat folks}
    Posted on August 6, 2012 at 6:52pm

    So the government won, another business is made to pay on the perception of guilt; they put them under enough pressure for long enough of time, w/o any charges, or a day in court, for the sole purpose of winning and thus setting a dangerous precident to crack down on any business with a presumption of guilt, whenever they wish.

    Report Post » Snowleopard {gallery of cat folks}  
    • blanco5
      Posted on August 6, 2012 at 7:00pm

      Are we officially more communist than china now?

      Report Post »  
    • deloclem
      Posted on August 6, 2012 at 7:03pm

      The chicago way!

      Report Post »  
    • Want our country back
      Posted on August 6, 2012 at 7:08pm

      cha ching …. $300,000 donation to the BO re-election fund…. along with the $400 that the illegals have to pay … cha ching cha ching cha ching

      I’ll do a Kory Booker – this administration is nauseating.

      Report Post » Want our country back  
    • chips1
      Posted on August 6, 2012 at 8:51pm

      If Romney wins the election, he will have to spend the first two weeks handing out pardons to all the military, private business owners and law enforcement officers that the Dems railroaded.

      Report Post »  
    • M24
      Posted on August 7, 2012 at 7:50am

      Now Its Time to Turn the tables , Vote All These Vomit Heads Out Of Office ! Do Not Be Afraid Of Any Government Agency ,Stand Your ground ,These Aszholes Are Bullies At best , They Can All Kiss My Asz So To Speak. Obama One And Done ,And take all Your shitz heads With you

      Report Post »  
  • Mr.Fitnah
    Posted on August 6, 2012 at 6:51pm

    Disgusting and cowardliness .

    Report Post » Mr.Fitnah  
  • bdandsl
    Posted on August 6, 2012 at 6:50pm

    Isn’t this called extortion?

    Report Post » bdandsl  
    • smokeysmoke
      Posted on August 6, 2012 at 6:59pm

      this was called extortion, but now its called “Fairness”

      Report Post » smokeysmoke  
    • AnAmericanToo
      Posted on August 6, 2012 at 7:16pm

      No! this is not extortion …this is the government building ‘your business” because ‘you didn’t build your business’.

      Report Post »  
  • Joyzee
    Posted on August 6, 2012 at 6:50pm

    Pay em in Pennies that crook’…man he’s gotta Go!

    Report Post »  
  • oddball130
    Posted on August 6, 2012 at 6:47pm

    Nazi’s in the US Government…it’s just the beginning.

    Report Post » oddball130  
    • db321
      Posted on August 6, 2012 at 6:53pm

      You have got to be kidding me – this is insane!

      Report Post » db321  
    • sWampy
      Posted on August 6, 2012 at 6:57pm

      Your name calling really drives your point home.

      Report Post »  
  • Larry E
    Posted on August 6, 2012 at 6:44pm

    So another $350k to the Obama campaign fund I guess.

    And he and little Tim wonder why the economy is on life support.

    Report Post »  
  • kickagrandma
    Posted on August 6, 2012 at 6:43pm

    That’s the way satan, this current un-AMERICAN government and the mafia work.

    I’m sorry Gibson agree to anything. Re open under another name: Gibbons or something! Or, GOD’s guitars. Come on, guys!!!

    Report Post »  
  • randy
    Posted on August 6, 2012 at 6:42pm

    Can you say Extortion?

    Report Post » randy  
    • kickagrandma
      Posted on August 6, 2012 at 6:47pm

      E-x-a-c-t-l-y!

      “Chicago values”!

      Report Post »  
    • RightUnite
      Posted on August 6, 2012 at 6:49pm

      EXTORTION… Couldn’t agree more.

      Report Post »  
    • Darmok and Jalad at Tanagra
      Posted on August 6, 2012 at 6:52pm

      Yes I can, but I will use the initials extortion goes by….DOJ. So, a company that has already lost a million dollars this year because of this is told to pay $300k and the whole thing goes away, or keep losing millions. But now they will look guilty in the eyes of the public, and will be ripe to have “Return” visits when the DOJ needs money. But at least they got Gibson to have their fingers boards made overseas, and punished those evil american workers. But I am sure a Govt representative came by to tell them how to apply for food stamps.

      Report Post » Darmok and Jalad at Tanagra  
    • sbenard
      Posted on August 6, 2012 at 8:01pm

      You read my mind! My thoughts exactly!

      Report Post » sbenard  
    • VanceUppercut
      Posted on August 7, 2012 at 9:47pm

      @randy

      Can you say they broke the law, and now they’re paying for it?

      Report Post »  
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