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Justice News

Department of Justice
U.S. Attorney’s Office
Western District of New York

Wednesday, June 3, 2015

Former Corprate President Sentenced For Conspiring To Smuggle Magnesium Powder Into The United States

CONTACT: Barbara Burns
PHONE:  (716) 843-5817
FAX #:                 (716) 551-3051

CONTACT:     Barbara Burns    
PHONE:           (716) 843-5817
FAX:                (716) 551-3051
BUFFALO, N.Y.-U.S. Attorney William J. Hochul Jr. announced today that Charles Wright, 64, of Ellwood City, Pennsylvania, who was convicted of conspiring to smuggle merchandise into the United States, was sentenced to time served and two years supervised release by Senior U.S. District Judge William M. Skretny. The defendant was also ordered to pay $1,933,999 in restitution. Wright has also forfeited $75,000.

Assistant U.S. Attorney Michael DiGiacomo who handled the case, stated that the defendant was the president of ESM Group, Inc., a specialty metal powders supplier.  While president Wright sought to expand ESM's customer base to include the defense industry.  In order to do so the defendant, entered into an agreement with Superior Metal Powders Inc., whereby Superior Metal Powders was to obtain and Market on behalf ESM Group Inc., this special form of magnesium powder.

At the time, the United States had a 305.56% antidumping duty in place with respect to the type of Magnesium powder Superior Metal Powders was importing on behalf of ESM Group, Inc.  While the agreement between ESM and Superior Metal Powders was in place the defendant learned the Magnesium powder Superior Metal Powders was obtaining on behalf of ESM Group Inc., from China was being imported in a manner that avoided the 305.56% anti-dumping duty.  After learning of this fact, Wright still authorized additional shipments of the Magnesium Powder knowing they were being imported in violation of the anti-dumping duty.  The total amount of lost duty to the United States from January 2005 through May of 2005 was approximately $1,933,999.

The magnesium powder was used to produce countermeasure flares which are used by the Department of Defense in military aircraft to divert heat-seeking missiles.

In April 2010, Wright, Gregory Magness, Justin Magness, William Nehill, and Eldon Bott were charged with participating in a conspiracy to import Chinese magnesium into the United States. All defendants now stand convicted.

The sentencing is the culmination of an investigation on the part of the Immigration and Customs Enforcement, Homeland Security Investigations, under the direction of James C. Spero, 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 Edward T. Bradley, Special Agent in Charge, Northeast Field Office.

Updated June 3, 2015