The U.S. Department of Justice announced that Gibson Guitar Corp. entered into a criminal enforcement agreement 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. 

Since May 2008, it has been illegal under the Lacey Act to import into the United States plants and plant products (including wood) that have been harvested and exported in violation of the laws of another country.  Madagascar Ebony is a slow-growing tree species and supplies are considered threatened due to over-exploitation and the harvest of ebony in and export of unfinished ebony from Madagascar has been banned since 2006.

What went wrong? Gibson purchased “fingerboard blanks,” consisting of sawn boards of Madagascar ebony, for use in manufacturing guitars but claimed they believed they were considered in finished form. The Madagascar ebony fingerboard blanks were ordered from a supplier who obtained them from an exporter in Madagascar. The supplier continued to receive Madagascar ebony fingerboard blanks from its Madagascar exporter after the 2006 ban but 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 and was told that the law passed in 2006 in Madagascar banned the harvest of ebony and the export of any ebony products that were not in finished form. They were further told by trip organizers that  fingerboard blanks were considered unfinished and therefore illegal to export under the 2006 law.  The Gibson employee conveyed the information to superiors at Gibson but then Gibson received four shipments of Madagascar ebony fingerboard blanks from its supplier between October 2008 and September 2009.

It was a no-win situation for Gibson and so they settled.  Obviously if they had simply exported the guitar jobs from America to another country, this was perfectly legal but because they were imported and that is (well, was) illegal under the ban in Madagascar, the Lacey Act made it illegal here and armed federal agents stormed the place.

The wrinkle; Madagascar has now lifted the ban, allowing export of fingerboard blanks provided the exporter can prove the legal origin of the product. Gibson was essentially caught between fickle law changes in that country.

The settlement defers prosecution for criminal violations of the Lacey Act and requires Gibson to pay a penalty amount of $300,00 plus a community service payment of $50,000 to the National Fish and Wildlife Foundation. Gibson will also implement a compliance program designed to strengthen its compliance controls and procedures. Gibson will withdraw its claims to the wood seized,  with a total invoice value of $261,844.