Federal prosecutors say the owner of Hank Lee's Magic Factory "made a mockery of the justice system" and want him to spend 30 months in prison for committing over $500,000 in credit card fraud.

"Under any set of circumstances, this is a bad crime: lengthy, repeated, calculated, and callous," federal prosecutor Scott Garland wrote in a filing Aug. 31. "Once federal investigators started investigating the fraud’s depth, breadth, and perpetrator, Harry Levy — though a beloved family man, a steadfast friend, and an engaging businessman — doubled down by lying to the investigators on three separate occasions."

In court papers filed last week, prosecutors outlined their requested sentence for Levy, a 61-year-old Lexington resident and the owner of the Medford-based magic store. He pleaded guilty to charges of credit card fraud and issuing false statements in April stemming from committing $561,927 in 134 false transactions between 2009 to 2011 on one customer's American Express card, then lying to investigators looking into the charges.

The U.S. Attorney's Office wants Levy to serve a 30 month sentence in federal prison, two years supervised release, pay resitution to the victim and an additional $60,000 fine, according to the government's sentencing memorandum.

Levy is scheduled to be sentenced Sept. 6 in U.S. District Court in Boston by Judge Patti Saris.

While prosecutors seek prison time, Levy is looking for a sentence of six months in a halfway house, six months of home confinement and three years probation, according to a sentencing memorandum filed Sept. 3 by his attorney, Steven Sussman.

"Although Levy has been in the magic business for many years, he had never before misused any customer’s financial or personal information," Sussman wrote. "Indeed, Levy had a well deserved reputation as an honest business- man."

Sussman's memorandum, partially redacted to preclude information from a psychological evaluation and other personal details, included letters submitted from friends, family and customers touting Levy's character.

Levy's business was opened in 1975 and it was successful for many years, but the internet dealt it a blow and Levy had to close his retail shop in Boston and pare down to two employees at his Medford warehouse in 2007, Sussman wrote.

Then, Levy was hit with a $4 million lawsuit in 2008 from the family of a young Tennessee boy who used his parent's credit card to order a chemistry-based magic trick and ended up losing six fingers in an explosion.

"The controversy about whether the insurer would cover the loss, on top of the catastrophic loss suffered by the young boy, weighed heavily on Levy, causing loss of sleep and abnormally high anxiety," Sussman wrote.

By 2010, the insurance company involved agreed to pay for damages in the incident, but Levy had already committed hundreds of thousands in credit card fraud against the customer, Sussman wrote.

Levy suffered "diminished capacity," meaning he could not fully comprehend the nature of his crimes, Sussman wrote.

But prosecutors said Levy is "exactly the sort of white-collar defendant for whom the Sentencing Guidelines were enacted," and that he shouldn't be allowed to avoid prison.

"In his bid to escape prison, Defendant makes much of his being a beloved family man, a steadfast friend, and an engaging businessman. But sentencing is not a popularity contest," Garland wrote. "When a bad person commits a bad crime, he should be sent to prison. When a good person commits a bad crime, he should be sent to prison, too; maybe not for as long, but to prison nonetheless."

The victim, a wealthy Texas resident, did not become aware of the fraudulent charges until 2011, when an assistant reviewed his credit card statements, according to court records. When investigators visited Levy, he mislead them. Levy blamed the fraud on other people defrauding the victim, and the victim himself, according to the filing.

Later, Levy provided investigators with fraudulent invoices, according to filings. It wasn't until a search warrant was obtained that investigators discovered the charges were made for Levy's personal use and he admitted to making the charges, according to federal court documents.

"Worse than the theft, he made a mockery of the justice system," Garland wrote.

But Levy's attorney says his crimes were not motivated by greed.

"(He) used the money to keep his business going and to pay salaries. More to the point, Levy did not profit from the offense; to the contrary, he must sell his house in order to pay the restitution in full," Sussman wrote. "His remaining two employees will lose their jobs in the event Levy is required to close his business."

Although the fraud totalled over $560,000, over $100,00 of that was re-couped by the credit card company, accordng to Sussman, leaving about $430,000 in restitution. Levy may have to sell his home and business to pay back the charges, according to Sussman.

Levy is scheduled to be sentenced Sept. 6 at 9 a.m. at U.S. District Court in Boston.