In August 2011, Nashville-based Gibson Guitar was raided by federal agents and ultimately charged with violating the Lacey Act, a law that bans importation of rare and endangered plants and wood products. At issue was wood imported from India that would be used for fret boards in the company's world-renowned electric guitars.

As ReasonTV's Anthony Fisher reported at the time:

The feds raided Gibson for using an inappropriate tariff code on wood from India, which is a violation of the anti-trafficking statute known as The Lacey Act. At issue is not whether the wood in question was endangered, but whether the wood was the correct level of thickness and finish before being exported from India. "India is wanting to ensure that raw wood is not exported without some labor content from India," says [Gibson CEO Henry] Juskiewicz. Andrea Johnson of the Environmental Investigation Agency (EIA) counters that "it's not up to Gibson to decide which laws…they want to respect." She points out that Gibson had previously been raided under The Lacey Act for imports from Madagascar.

Now Gibson has settled with the government. From a Christian Science Monitor account:

Nashville-based Gibson agreed to pay a $300,000 penalty, forfeit claims to about $262,000 worth of wood seized by federal agents and contribute $50,000 to the National Fish and Wildlife Foundation to promote the conservation of protected tree species. "The agreement is fair and just in that it assesses serious penalties for Gibson's behavior while allowing Gibson to continue to focus on the business of making guitars,"U.S. Attorney Jerry Martin said in a statement. "We felt compelled to settle as the costs of proving our case at trial would have cost millions of dollars and taken a very long time to resolve," CEO Henry Juszkiewicz said in a statement late Monday night. "This allows us to get back to the business of making guitars," he said, noting that the settlement would allow them to continue sourcing rosewood and ebony from India as it has for decades.

Gibson CEO Henry Juskiewicz became widely known after he reacted to the raid by protesting his company's innocence of running afoul of arcane restrictions (the case here hinged on the degree the wood was finished in India, not whether it was endangered or illegally harvested) in the pages of national newspapers and in Senate hearings held by Sen. Rand Paul (R-Ky.).

Watch ReasonTV's February 2012 video on the story, Anthony Fisher's "The Great Gibson Guitar Raid," by clicking above.

Read Reason's coverage of the case from start to finish.