Apr 30, 2010 6:35 PM

Investigators find possible military supply fraud

Federal authorities in New York say they've uncovered a scheme involving substandard magnesium powder from China that made it into the U.S. Defense Department's arsenal.

The U.S. attorney's office and Immigration and Customs Enforcement in Buffalo announced conspiracy and wire fraud charges against six people and three companies Friday.  Investigators say the powder was mixed with aluminum nuggets and mislabeled to avoid a steep import tariff. The importing company then sold it to a business that removed the aluminum and resold it as American-made.

From there, it was used to make almost 2 million flares used by military aircraft to divert heat-seeking missiles. None made it onto aircraft, and all will be destroyed.


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