Subterfuge of old magistrate, jailing Penny once (5)
I believe the answer is:
dodge
'subterfuge' is the definition.
(thesaurus)
'old magistrate jailing penny once' is the wordplay.
'old magistrate' becomes 'doge' (as in the Doges of Venice).
'jailing' indicates putting letters inside (inserted letters are jailed).
'penny once' becomes 'd' (abbreviation for pre-decimal penny).
'doge' going around 'd' is 'DODGE'.
'of' is the link.
(Other definitions for dodge that I've seen before include "Avoid or evade by bodily movement" , "Avoid by sudden move" , "Evade; ruse" , "A quick evasive movement" , "Elude, sidestep" .)