PRESS RELEASE FROM GIBSON GUITAR CORP.   —–     August 25, 2011

Gov’t says wood is illegal if US workers produce it

The Justice department bullies Gibson without filing charges.

The Federal department of Justice in Washington DC has suggested that the use of wood from India that is not finished by Indian workers is illegal, not because of US law, but because it is the Justice Departments interpretation of a law in India.  (If the same wood from the same tree was finished by Indian workers, the material would be legal).  This action was taken without the support and consent of the government in India.

On August 24, 2011, around 8:45 am, agents for the federal government executed four search warrants on Gibson’s facilities in Nashville and Memphis and seized several palettes of wood, electronic files and guitars. Gibson had to cease its manufacturing operations and send workers home for the day while armed agents executed the search warrants. Gibson has fully cooperated with the execution of the search warrants.

This is the second time that federal agents have raided Gibson facilities and disrupted production this time causing lost productivity and sales.

·       Wood seized was Forest Stewardship Council Controlled

The wood the Government seized on August 24 is from a FSC certified supplier and is FSC Controlled, meaning that the wood complies with the standards of the Forest Stewardship Council, which is an industry-recognized and independent not-for-profit organization, established to promote responsible management of the world’s forests.  FSC Controlled Wood standards require, among other things, that the wood not be illegally harvested and not be harvested in violation of traditional and civil rights. See www.fsc.org for more information.  Gibson has a long history of supporting sustainable and responsible sources of wood and has worked diligently with entities such as the Rainforest Alliance and Green Peace to secure FSC-certified supplies.  The wood seized on August 24 satisfied FSC standards.

·       Nearly two years later no charges have been filed

  In 2009, more than a dozen agents with automatic weapons invaded the Gibson factory in Nashville.  The Government seized guitars and a substantial amount of ebony fingerboard blanks from Madagascar.  To date, 1 year and 9 months later, criminal charges have NOT been filed, yet the Government still holds Gibson’s property.  Gibson has obtained sworn statements and documents from the Madagascar government and these materials, which have been filed in federal court, show that the wood seized in 2009 was legally exported under Madagascar and that no law has been violated. Gibson is attempting to have its property returned in a civil proceeding that is pending in federal court. 

The Justice Department has asked the judge to stop the court case indefinitely.

       Information sought in raid was already made available

Since 2009, Gibson has fully cooperated with the Government’s investigation of wood and has provided substantial documentation regarding Gibson’s wood buying activities over the years. Yet the federal Government raided Gibson’s facilities on August 24, 2011, without warning or communication of any kind.  Had the Government simply communicated with Gibson, Gibson would have cooperated without having to stop its production and to send workers home.

       Not about illegal logging, not about conservation, not about the environment

The US Lacey Act does not directly address conservation issues but is about obeying all laws of the countries from which wood products are procured.  This law reads that you are guilty if you did not observe a law even though you had no knowledge of that law in a foreign country.  The U.S. Lacey Act is only applicable when a foreign law has been violated.

       Gibson is innocent and will fight to protect its rights

Gibson has complied with foreign laws believes it is innocent of ANY wrong doing.  We will fight aggressively to prove our innocence.

Several months ago, the Federal Prosecutor threatened a production employee with 5 years in jail.  I was outraged and wrote the below opinion piece.

Government bullies Gibson without filing charges

Prosecutor threatens production employee

With 5 years in a Federal Penitentiary.

When big government uses its power to bully and intimidate one of our production employees, I must stand up and share my sense of outrage.  I have always stood up to bullies.  This is just one of many cases of Federal Government arrogance and the abuse of power.  I need your help, but first let me tell you our story.

Imagine that you are working at your desk or work bench doing your job.  You, not the CEO of the company, not a corporate officer, but YOU are forced to appear in front of a Federal prosecutor who threatens to indict YOU personally.  The company scrambles to get you a lawyer and you spend hours preparing for what is supposed to be a fact finding interview.  Instead, the prosecutor looks you coldly in the eyes and says you will be indicted and if convicted you will spend five years of your life in a Federal jail.  If you plead guilty (despite the fact there is no proof of wrong doing) you will only get 1 to 2 years in jail. 

WHY IS BIG GOVERNMENT SPENDING OUR MONEY TO HARM ORDINARY CITIZENS AND SMALL BUSINESS?

Ask yourself why is the Washington establishment going after this worker? 

When big oil polluted the Gulf of Mexico, caused millions in damages, there was no indictment of anyone.  There were no jail terms threatened even though there was a loss of many lives, big damage to wildlife and nature, and a huge impact on Gulf jobs.

When Ray Joseph stole $2.7 million dollars in a Ponzi scheme to enrich himself the government did react.  This was malicious, intentional, and injured other people financially. But big government, led by Ms. Colbourn, is spending as much money to persecute a hard working production employee trying to support his family with nearly the same sentence.  What are the powerful people in Washington trying to achieve?  Where is their sense of fairness and right?

Department of Justice Press Release


Image026

For Immediate Release
March 22, 2010

United States Attorney’s Office
Eastern District of Michigan 
Contact: (313) 226-9100

Bloomfield Hills Resident Goes to Jail for Multi-Million-Dollar Lender-“Ponzi” Scheme

DETROIT, MI—Raymond Frank Joseph, 55, of Bloomfield Hills, was sentenced today to 66 months in prison, followed by three years of supervised release, after having have been convicted in December 2009, of three counts of wire fraud, nine counts of interstate transportation of stolen money or property, and 24 counts of conducting monetary transactions in criminally derived property, announced Barbara L. McQuade, United States Attorney for the Eastern District of Michigan. Joseph was also ordered by pay restitution in the amount of $2.2 million to victims of his Ponzi scheme.

Ms. McQuade was joined in the announcement by Special Agent in Charge Maurice Aouate, Internal Revenue Service Criminal Investigation Division and Special Agent in Charge Andrew Arena, Federal Bureau of Investigation.

A federal jury found Raymond Frank Joseph guilty of all 36 counts following a two-week jury trial in Detroit before United States District Court Chief Judge Gerald E. Rosen. After the verdict, the Court revoked bond and remanded the defendant to custody pending today’s sentencing.

According to court records, from 2002 through 2007, Joseph solicited loans of money from several individuals to invest in a number of business ventures. To induce the lenders to give him their money, Joseph fraudulently promised the victims a specific date of repayment with interest resulting from his claimed business investment of the money. When Joseph received the lenders’ money, he did not invest it as he had earlier represented but instead used the loaned money: (1) to repay, in a manner characteristic of a “Ponzi” scheme, other individuals who had earlier loaned Joseph money; and (2) to fund Joseph’s own personal expenses, including his credit card bills, household expenditures, and vehicle costs. As a result of his fraudulent acts, Joseph obtained approximately $2.7 million dollars which he failed to repay his lenders.

The US Department of Justice, in Washington DC, has assigned Federal Prosecutor Elinor L. Colbourn to targeted Gibson Guitar Corp.  Ms. Colburn has been investigating Gibson for possible violations of the Lacey Act.  The government without any prior warning broke into Gibson’s main plant in Nashville, TN with over a dozen heavily armed Federal Agents in swat attire on November 17th, 2009.  They refused to discuss why they were there. They scared and forced approximately 300 people out of the plant at gun at their side. They confiscated $300,000 of finished parts and guitars, and spent the better part of the day at Gibson disrupting work and intimidating the workers.

While there, they pulled aside production employees and in some cases put them in a room while they interrogated them individually without a lawyer with several full armed agents in a hostile and intimidating fashion.

Gibson has been under investigation and continues to cooperate with the government since the raid conducted on November 17th, 2009.  There were many promises of prompt action on the part of the lead prosecutor Ms. Colbourn to Gibson’s General Counsel.  This big government agency still has not filed charges, nor done more than hint the issue may have to do with wood procured from Madagascar.  (Wood can be legally procured from Madagascar.)

        Gibson Guitar Corp. is a good corporate citizen that has given away millions of dollars through its Gibson Foundation.

·        Gibson is a privately held entrepreneurial company that competes against Yamaha Corporation based in Japan which is many times its size, among other well run competitors.

        Gibson branded product are exclusively manufactured in the United States.  Gibson has consistently been increasing its US employment including this year.  Gibson has factories in Nashville, TN; Memphis, TN, Truman, AK and Bozeman, MT.

·        Gibson exports approximately 60% of its goods, successfully selling in countries like China, Japan and very soon in India.

WHY IS BIG GOVERNMENT SPENDING OUR MONEY TO HARM ORDINARY CITIZENS AND SMALL BUSINESS?

The Federal Government is spending millions of tax payer dollars to persecute Gibson Guitar Corp. and indict a production employee.  This has already cost Gibson almost $1 million dollars.  Gibson’s costs must be passed on to customers.

Their campaign of legal terrorism used intimidation, and deceit.  This terrorism is aimed at ordinary citizens and a smaller entrepreneurial company with a history of doing good.  The government could have warned Gibson and other businesses that a law (which passed about a year before the raid) would require additional caution or procedures.  There was no such warning, nor is there yet a written procedure to insure you comply with that new law (which is required by the law itself).

Is the Federal Government trampling on the American values of fair play?  Is the big government agency acting of and for the people, or is it acting like a giant ogre swinging an expensive and hurtful club against ordinary citizens and small business.  They chose guns, swat teams and Ivy League lawyers over dialogue.

But there is more insanity.  The reason Gibson is being persecuted is because our production employee went on a trip to Madagascar sponsored by Green Peace to encourage certification of its forestry resources!  Several competitors which were part of the Music Wood Coalition also went on this trip.  Neither our competitors, nor the broker that we actually bought the wood from have been investigated.

From: Scott Paul [mailto:scott.paul@wdc.greenpeace.org]
Sent: Thursday, February 21, 2008 12:51 PM
To: gpaul@martinguitar.com; Nick Colesanti; Rob Stangelini; Mjanopaul@fender.com; Bob Taylor; Dave Berryman; Henry Juszkiewicz; Jake Jackson; Brian Jemelian; kazumi_ishikawa@gmx.yamaha.com
Cc: Rob Garner; Larry Edwards; Rolf Skar
Subject: Save these dates – Sealaska & Madagascar

Here are a few dates to pencil in.  Rob and I will be following up with more information shortly.

3. Madagascar (Two current possible windows – May 12-24 or 14-26 / twelve day window)

Rob will continue to communicate with all of you about this trip as it shapes up.  Currently it’s looking good.  I believe that if we can reach a critical mass of Coalition participation than this trip will happen.  While full details are still emerging the trip does sound like an incredible opportunity to see this exotic land from an unprecedented vantage point.  It is clear that we will have the opportunity to visit key production areas and meet with key players in the government, business and NGO community.  The possibility of this trip is generating considerable attention in Madagascar and across the FSC community.

Scott Paul
Director, Forest Campaign
Greenpeace USA
702 H Street, NW
Suite 300
Washington, DC 20001

Tel: 202 319 2469
Fax: 202 462 4507


        In a 2006 case pending in the Middle District of Tennessee, Ms. Colbourn represented the United States against a defendant, Ed Winddancer, indicted for possessing and bartering eagle and other feathers for use in his Native American dancing and performances.  Judge Trauger denied the defendant’s motion to dismiss, among other reasons, because the defendant was not a member of a federally recognized Native American tribe.

·        Ms. Colbourn was also involved in prosecuting a criminal case filed in 2009 against a company alleged to have falsely labeled and sold frozen catfish as grouper; following a trial, the president of the company was sentenced to 63 months in prison. 

        In a case initiated in 2006, the government prosecuted a member of the Northern Arapaho Tribe of Wyoming for shooting a bald eagle for use in a traditional religious ceremony without a permit; on appeal, the 10th Circuit reversed the district court’s finding that the Religious Freedom Restoration Act precludes the government from prosecuting the defendant, and remanded the case for trial.  

Ms. Colbourn was a hired gun that used legal violence to protect big government when big government does damaging and hurtful things:

·spanspanspan        In the early-to-late 1990s, Ms. Colbourn assisted in the defense of various environmental claims brought against governmental agencies.  As an example, Ms. Colbourn was involved in defending a case filed in 1996 challenging regulations promulgated by the Secretary of Commerce that allegedly had a disastrous impact on small fishing boat op

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