Gibson Guitar Case Ends in Settlement Agreement

Aug 6, 2012

Federal Prosecutors say a deal has been reached to drop the criminal case against Gibson Guitar Corporation. A highly publicized raid of the company’s Nashville facilities had drawn controversy for several months. The company, which manufactures some of the best-selling guitars in the world,  will pay a 300 thousand dollar fine.

In addition to the fine, Gibson will forfeit claims to about 262 thousand dollars worth of wood that federal agents had confiscated from the company’s production facility. Gibson CEO Henry Juskiewicz was highly critical of the way the federal government sent armed agents onto his factory’s floor to seize wooden fingerboards after the 2011 raid.

Shortly after that 2011 raid, Juskiewicz told WKU Public Radio that the raid had cost the company  about one million dollars because all workers were sent home for the day. …and production had to be stopped.  According to Federal Prosecutors,  the new settlement will cost Gibson  a lesser amount...300 thousand dollars….plus a 50 thousand dollar contribution to promote conservation of protected tree species.  The Justice Department says Gibson has agreed to a "criminal enforcement agreement," but the guitar manufacturer will not be charged with criminal wrongdoing. 

The case had drawn widespread criticism from Tennessee lawmakers, who objected to the way the U.S. Justice Department handled the investigation. At its Nashville facility, Gibson manufactures some of the best-selling guitars  in the world, including the Les Paul models, the SG , the Firebird, and the ES-335.