The US government has settled its legal case against the iconic Gibson Guitar company over use of illegal timber from Madagascar in its instruments.

Nashville-based Gibson, whose products are used by artists in every genre of music, will pay a $300,000 fine and a $50,000 community payment.

Gibson admitted violating the Lacey Act, which requires firms to know that timber they use is legally obtained.

Deforestation is a huge issue affecting Madagascan wildlife such as lemurs.

Gibson’s premises were raided by the US Fish and Wildlife Service (FWS) in 2010 and 2011, with agents impounding ebony and rosewood imported from Madagascar and India.

The US government has settled its legal case against the iconic Gibson Guitar company over use of illegal timber from Madagascar in its instruments

The FWS found evidence that an employee had told Gibson two years previously that its Madagascan imports might be illegal, but that the company had nevertheless ordered further stocks.

“As a result of this investigation and criminal enforcement agreement, Gibson has acknowledged that it failed to act on information that the Madagascar ebony it was purchasing may have violated laws intended to limit overharvesting and conserve valuable wood species from Madagascar, a country which has been severely impacted by deforestation,” said Assistant Attorney General Moreno following the settlement.

The ebony was mainly in the form of strips that would be fashioned into fretboards for guitars, mandolins and banjos.

Following the raids, environment groups urged the US Department of Justice to press its case and make a high-profile example of the guitar manufacturer.

But Gibson boss Henry Juszkiewicz said the issue was an example of the “over-reach” of government.

The case became a cause celebre in Tea Party circles, with right-wing politicians saying a US company should not be treated this way over environmental concerns.

The US Congress amended the Lacey Act in 2008 to tackle the continuing demand for hardwoods such as ebony in the face of evidence that much of the international trade was illegal.

The act is now one of the world’s toughest laws on the issue.

In March, the World Bank published a report indicating that the illegal timber trade was worth $10-15 billion per year globally.

Illegal logging in Madagascar became much more severe after the 2009 coup that brought Andry Rajoelina to power.

Conservation groups working in the country say enforcement of logging laws is virtually non-existent in many areas.

In addition to the payments, Gibson is withdrawing its claim to wood seized by the FWS, estimated to be worth more than $320,000.

The company has not yet commented on the settlement.