Gregory Magness, a 67-year-old businessman from Polk, Pa., as sentenced by Senior U.S. District Judge William M. Skretny to 18 months in federal prison and ordered to pay nearly $6.3 million in restitution to the U.S. government for a decade-long customs fraud involving shipments of magnesium his Superior Metal Powder Inc. company of Franklin, Pa., supplied to the U.S. Department of Defense for use in the production of countermeasure flares for the U.S. military.
Justin Magness, 39, the businessman’s son and vice president of his company and a resident of Clymer in Chautauqua County, was placed on probation Tuesday for one year by Judge Skretny and ordered to pay $4500 in restitution to the U.S. government for the customs fraud.
The Magnesses both pleaded guilty in January. Gregory Magness pleaded guilty to felony charges of conspiracy to smuggle merchandise into the U.S. and conspiracy to launder money. Justin Magness was allowed to plead guilty to misdemeanor charges of aiding and abetting in false documents given to U.S. Customs officials in the family business since at least 2004.
Assistant U.S. Attorney Michael DiGiacomo said that the Magness company could get the magnesium it needed only in other countries, with China supplying the best. But The U.S. hit China with a 305 percent anti-dumping duty on all Chinese magnesium shipped into this country so the Magnesses falsely labeled the magnesium they were getting to be from countries carrying only a 5 percent duty, defrauding the federal government of about $6 million their company owed in duties payments, DiGiacomo said.