Father And Son Sentenced For Defrauding The United States
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051
BUFFALO, N.Y.-U.S. Attorney William J. Hochul Jr. announced today that Gregory Magness, 67, of Polk, Pennsylvania, who was convicted of felony charges of conspiracy to smuggle merchandise into the United States and conspiracy to launder money, and his son Justin Magness, 39, of Clymer, NY, who was convicted of a misdemeanor charge of aiding and abetting in the presenting of false documents to United States Customs, were sentenced by Senior U.S. District Judge William M. Skretny.
Gregory Magness was sentenced to 18 months in prison and ordered to pay $6,246,605 in restitution to the United States. Justin Magness was sentenced to one year probation and ordered to pay $4,500 in restitution to the United States.
Assistant U.S. Attorney Michael DiGiacomo, who handled the case, stated that Gregory and Justin Magness owned and operated a metal powders business. During the course of the operation, they became involved with supplying magnesium used to produce countermeasure flares for the United States Department of Defense. Since the defendants could not produce the magnesium domestically, they imported it from China. However, the United States had a 305% anti-dumping duty in place with respect to magnesium imported from China. In order to avoid paying the 305% duty, the defendants falsely labeled it as a magnesium product only subject to a 5% duty thereby defrauding the United States out of lawful duties.
The sentencings are the culmination of an investigation on the part of the Immigration and Customs Enforcement, Homeland Security Investigations, under the direction of J. Michael Kennedy, Acting Special Agent in Charge, the Internal Revenue Service, Criminal Investigation Division, under the direction of Shantelle P. Kitchen, Special Agent in Charge, and the Department of Defense Criminal Investigative Service, under the direction of Craig W. Rupert, Special Agent in Charge, Northeast Field Office.
The plea is the culmination of an investigation on the part of the FBI's Safe Streets Task Force which includes representatives of the Amherst Police Department; the Buffalo Police Department; U.S. Border Patrol, the Bureau of Alcohol, Tobacco, Firearms, and Explosives; the Cheektowaga Police Department; the Erie County Sheriff’s Department; the Hamburg Police Department; the Lancaster Police Department; the Niagara Frontier Transportation Authority Police; the New York State Department of Correctional Services; the New York State Police; and U.S. Immigration and Customs Enforcement, Homeland Security Investigations. Additional assistance was provided by the Drug Enforcement Administration; U.S. Customs and Border Protection, the United States Marshal Service, the Lackawanna Police Department, and the Niagara County Sheriff’s Department.
Skipper will be sentenced on December 18, 2015 at 1:00 p.m. before Judge Arcara.