why were joe and steve put in jail?

They were charged with shipping damaged aircraft engine cylinder heads (for P-40s) out of his factory during WWII, inadvertently causing the deaths of 21 pilots.

At first, Steve and Joe were put in jail because their factory (they were partners) has shipped defective parts for the army and 21 pilots who flew the planes in which the parts they sent were installed, had crashed and died. That's why they were put in jail.

In the appeal Joe was released but Steve remained in prison.