Seller of Inferior Steel Used in Military Craft Gets 5-Year Term

A La Habra businessman was sentenced Monday to five years in prison for selling inferior-grade steel for use in military helicopters, jets, the cruise missile and commercial aircraft.

Gary Phillip Mahan, 51, told U.S. District Judge Ronald S. W. Lew that he was sorry for doing “a great wrong.”

The U.S. Army has directed subcontractors for several aircraft to review production records for possible recall of components made from steel supplied by Mahan’s firm, Pacific Alloys Co., according to Assistant U.S. Atty. Brian J. Hennigan.

The sentence surprised Mahan’s lawyer, H. Gene Collins.

“I didn’t expect this,” Collins said. “I thought he’d get something less. I thought maybe three years.”

In the brief hearing in federal court in Los Angeles, the judge told Mahan that he considered his crime “quite serious.” Lew also ordered Mahan to pay a $30,000 fine and serve five years’ probation after his release from prison.

Department of Defense investigators alleged that Mahan supplied weaker, cheaper steel in almost three-quarters of the 411 military supply contracts his firm held for several years.

The defective steel was sold to subcontractors making components for the Apache A-64 helicopter, the F-14 jet fighter, the cruise missile and the F-18 Hornet, F-4 and F-5 fighter planes, according to the government.

The grade of steel Mahan sold was about a third cheaper than the grade called for in government contracts, Hennigan said.

Collins said Mahan used profits from sales of the substandard steel in an effort to get out of debt.

Mahan, who pleaded guilty to mail fraud and making false statements to the government, could have been sentenced to 20 years in prison.