Gibson Guitar In Settlement On Illegal Wood Imports

By: CNNMoney (Posted by Carissa Fox)
By: CNNMoney (Posted by Carissa Fox)

NEW YORK (CNNMoney) -- Gibson Guitar Corp. has agreed to pay a fine for illegally importing exotic wood from Madagascar and India, the U.S. government said Monday.

Gibson will pay a $300,000 penalty to avoid criminal charges for importing ebony and rosewood in violation of the Lacey Act, which prohibits the acquisition of plant products that are protected in other countries, the Department of Justice said in a statement.

In this case, Gibson was accused of illegally importing ebony from Madagascar and India, as well as rosewood from India.

The guitar maker will also have to make a "community service payment" of $50,000 to the U.S. National Fish and Wildlife Foundation to promote conservation and development of tree species used in making musical instruments.

The company also will withdraw its claims to the $262,000 worth of exotic woods seized by federal authorities, said the Department of Justice.

The settlement stems an incident last year, when agents from the U.S. Fish and Wildlife Service raided two of Gibson's factories in Tennessee and its Nashville headquarters on Aug. 24. At the time, Gibson CEO Henry Juszkiewicz said the agents confiscated about $1 million in Indian ebony as well as guitars and electronic data.
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A Gibson spokesman was not immediately available for comment to CNNMoney about the settlement.

On July 19, the Wall Street Journal published an op-ed piece by Juszkiewicz that detailed the raid, which he says cost his company $2 million to $3 million in products and productivity.

He also said the importation was in compliance with the laws of India. He called the U.S. government's actions an 'overreach" and a "job killer."

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