Man Pleads Guilty to Importing Magnesium in Avoidance of 305% AD Duty
U.S. Immigration and Customs Enforcement (ICE) announced on March 13, 2012 that Charles Wright, former president of ESM Group Inc., a specialty metal powder supplier, has pleaded guilty to smuggling magnesium powder into the U.S. and avoiding a 305.56% antidumping duty for such merchandise from China.
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Knowingly Imported Magnesium Powder in Spite of Antidumping Duty Violation
As president, Wright sought to expand ESM's customer base to include the defense industry. In order to do so, Wright entered into an agreement with Superior Metal Powders Inc., whereby Superior Metal Powders was to obtain and market on behalf ESM Group Inc., a special form of magnesium powder.
At the time, the U.S. had a 305.56% antidumping (AD) duty in place with respect to the type of magnesium powder Superior Metal Powders was importing from China. After entering into the magnesium agreement, Wright learned that the magnesium powder was being imported in a manner that avoided the 305.56% AD duty. Despite this knowledge, Wright authorized and obtained additional shipments of the magnesium powder knowing it was being imported in violation of the AD duty. The total amount of lost duty to the U.S. 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.)
5 Add'l Individuals, 4 Companies Included in Indictment
Wright was charged in an indictment in April 2010 along with Gregory Magness, Justin Magness, William Nehill, Eldon Bott, and Qian Chen. Superior Metal Powders, Inc., International Technology Group, Inc. and Innovative Materials & Solutions, Inc. were also named in the indictment. Wright is the first to be convicted in this case.
His sentencing is scheduled for June 27, 2012.