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The FAA whistle blower, Charles Shi, has been exposing the safety threat concerning counterfeit safety parts made by a Chinese supplier-NHJ and knowingly installed by Moog Aircraft on some 500 Boeing planes, mainly B7373 and B777.
After I whistle blew to FAA in early 2016, FAA conducted two investigations on the same complaints. The first investigation ended in June, 2016 with no violation findings despite solid objective evidence given. The second investigation was conducted only in mid-August, 2016 after I submitted compelling evidence NHJ falsified material fact and used substitute material for single point of failure blocking of B737 spoiler.
By that time, I and my then U. S. lawyer repeatedly requested FAA to contact law enforcement agencies (LEAs) for criminal investigation, later I escalated the request to an FAA administrator. But all efforts went in vain!
The FAA was determined to cover up the massive Chinese counterfeiting and Moog fraud in complete disregard of flying public safety.
Below were the email communications I had with Mr. Robert Fortune, FAA investigator in September 2016 that testified FAA' willful inaction.
Sent: Monday, September 12, 2016 6:16 PM
Subject: MOOG Whistle blower Case
I am Bob Fortune from the FAA, I was assigned again to investigate the re-opened whistle blower case about NHJ. I read the 8 issues you reported in July 2016. I understand NHJ had traceability issues, but I could not verify that NHJ "forged" manufacturer travelers (issue no. 2).
Can you provide any more details about who forged manufacturing travelers and when and which part numbers(p/n's)?
Bob FortuneAviation Safety Inspector
ACAIS Data Coordinator
Boston Manufacturing Inspection District Office,
Mr. Robert Fortune email to Charles Shi 09/12/2016
In my reply email, I explained in detail who at NHJ admittedly forged Traveler of the safety blocking of B737 spoiler and how they did it.
(Traveler is the most important traceability documentation in aerospace manufacturing. In Moog Aircraft Supplier Quality Requirement(SQR-1), it states very clearly:
4.5 Travelers - Suppliers shall maintain a traveler, router, process flow sheet, or equivalent control mechanism that directs procedures appropriate for the control of quality and configuration through all stages of production. )
Reply Email by Charles Shi 09/18/2016
From: chaosheng shi [mailto:[email protected]]
Sent: Sunday, September 18, 2016 9:58 PM
To: Fortune, Robert (FAA); chaosheng shi
Cc: [email protected]; 9-FAAHotline (FAA); lrglcom; Westrom, Al (FAA); Murray, Vince (FAA); Atherton, David (FAA)
Subject: MOOG Whistle blower Case
Dear Mr Fortune,
Thank you for writing me back, it's been since the 20th of April that we last communicated. I would like to address a few things in this email:
Firstly, answering your questions that you could not verify that NHJ "forged" manufacturer's travelers (issue no. 2).
Secondly, my whistle blowing case is against a demonstrated criminal operation and has tremendous safety impacts.
Thirdly, An Appeal to Administrator of FAA and Director of FAA Audit and Evaluation Office
Firstly, to answer your questions that you could not verify that NHJ "forged" manufacture(s)' traveler documents (issue no. 2).
Bob, I assume you have read all my communications with the FAA safety hotline which I communicated with over the last 9 months.
The very first one dated 13th Jan, 2016, very clearly "details about who forged manufacturing travelers and which part numbers."
Please see the below quote from that email.
P665A0039-02 is probably the only part Claire Starzak checked concerning traceability of raw materials, (please refer to below statement by Mr. XXX and paragraph page 3 of attachment 3), When Mr.XXX told Claire to look deeply into why NHJ forged the traveler, she declined to do so during her 3rd (should be 2nd) on-site investigation.
Mr.XXX's statement:"P665A0039-02, one lot shipped total 217 pcs to BAG(Baguio), (NHJ) could not find a traveler initially, but finally a traveler came with quantity of 264 pcs from OP1(Operation 1) to last Machining OP; no scrap and no NC (non conformance), NHJ said 47 pcs were scrapped during OSP (outside special process).
Reviewed NHJ PO system, 235pcs (were) sent to OSP (outside special process) that could not match neither 264 pcs nor 217 pcs shipped to Moog. NHJ could not explain the numbers?? They did not make up the story.
Miss Mao Caifeng, the QE (Quality Engineer) of New Hongji (NHJ) told me and Ron (Another Moog SDE) privately on the 1st of September, one day before Claire and Lee conducted their 2nd audit, they forged traveler during the 8/21 audit because they didn't have an original traveler in the first place.
I provided to you more details and explanations on emails sent April 7th by point #3 and April 9th again by item #2, respectively. I believe that I have sufficiently answered your specific questions in this regard.
As far as to the fact you could not verify NHJ forged travelers, I would, if I were the investigator, request the testimony from Mr. XXX authenticating what he stated in the past and call for a law enforcement agency (LEA) to investigate, as this is potentially an organized crime. I could not from my perspective see why you did not act to verify if NHJ forged a traveler which was simply a criminal act.
Further, concerning possible NHJ organized crimes relating to safety issues, I am left wondering which FAA procedures or processes were followed to investigate the matter.
I found on FAA's website, FAA Order 8120.16A, Suspected Unapproved Part Program and FAA Order 2150.3B. I believe these should apply to my case:
From mid January, 2016 to present, the central purpose of my whistle blowing on the suspected unapproved parts is to tell FAA that NHJ is a criminal entity in an organized way who:
-Systematically and deliberately falsified material certificates by changing and adding the quantities of approved material sources on the certificates, while using unapproved/questionable substitute materials instead.
The falsified certificates were later submitted to Moog, who used them to fraudulently mislead other companies (Boeing in particular), and to the FAA, who falsely concluded there were no present violations.
-Forged company stamps, which were used to falsify material certification and purchase orders. I have in my possession evidence and voice recordings that prove that the NHJ engaged in this action.
I have testimony (evidence) stating that there were approved RM(raw material) companies' stamps at NHJ's work site, which were used to fraudulently perpetrate the illegal movement of unapproved materials by creating a method by which these materials appeared like those products that are made from the approved sources.
Unfortunately, FAA never asked for testimonial evidence proving the fraud and crimes.
- NHJ committed the same crime with its previous aerospace customer BE Aerospace from 2009-2013, resulting in B/E Aerospace product failures with NHJ delivered materials. B/E Aerospace stopped working with NHJ for this specific reason.
-Has Sold these (counterfeit)parts to Moog, which were installed on (Boeing)airplanes. NHJ committed this exact crime massively and systematically with more than 30 part numbers, thousands of pieces of production (Boeing plane) parts which had already been delivered to Moog.
Moog has assembled these counterfeit parts into safety critical flight control systems, which have since been installed in Boeing airplanes with models such as B737, B777, ... This fact was proven as NHJ was the single source for those parts from the beginning of 2014 to at minimum late 2015, compromising hundreds of airplanes.
The degree to which NHJ is engaged in organized crime is unspeakably extraordinary because we are talking about not just one or two airplanes, but between 300-500 Boeing commercial airplanes, which have been fraudulently misrepresented as being mechanically sound by both NHJ and Moog.
The fact that Moog took no action to voluntarily recall these NHJ (counterfeit) parts, which used large quantities of substitute materials with no traceability, makes it the biggest scam or fraud in the history of the aviation industry.
The only corrective action Moog (or any other entity) can take to get rid of the safety threat is to recall all parts sourced from NHJ at whatever cost. This is because without doing so, the integrity of the safety critical flight control systems are fundamentally compromised.
During past 9 months, I repeatedly (at least 4 times) have requested Moog and FAA to verify material facts to conclude this whole matter is an act of organized crimal enterprize that committed counterfeiting at massive scale.
1. On Jan 13th,2016, when I initially contacted FAA, I requested after offering many (solid) criminal tips and pieces of evidence that "Moog conduct a grand investigation within Moog or jointly with FAA/Boeing on NHJ immediately, looking into all Raw Material(RM) purchases, and verify the data with the RM vendors. And, further, to check all traceability documents including travelers, scrap reports, etc. from NHJ, comparing that of good material purchased."
2. On April 7th, 2016, I emailed Mr. Bob Fortune and requested FAA, "to start with part number P665A0039 and check with (approved) Raw Material vendor(s) to see how much material NHJ was bought from them, how much used, scrapped, still in stock and then examine the numbers.
NHJ had a wrong machining process resulting in multiple lots scraped before July, with each lot we are talking about 250pcs. (These must be considered)"
3. On April 20th, I stated to Mr. Bob Fortune in an email that, "I believe my statement can be verified and confirmed by collecting data for material purchased from approved sources, less the equivalent parts shipped to Moog, less scrap, less WIP (work in progress), less material still in stock for all P/N(part number) lots made before August and then draw conclusions.
Moog flight control systems are so essential to the safety of an airplane that there cannot be any compromises of traceability and substitute material.
This is why I risked my job and even my life,and the jobs and lives of others who joined me in whistle blowing.
To reduce the burden of getting all parts investigated, I would recommend initially looking deeply into P/N P665A-0039-02 . This is the very part on which Claire performed her investigation. She likely copied some if not all of the files relating to manufacturing process, in case she did not, you can request for all documents from NHJ.
The key is to first confirm with approved Raw Material vendors how much material NHJ did buy from them for those lots and parts made between early 2014 to Aug., 2015.
4. On July 13th I appealed once again to FAA's safety hotline, requesting that an investigator, "Start with part number P665A0039, and check with the raw material vendor to see how much material NHJ did buy from them, how much was used, scrapped, or still in stock and then see the resulting numbers.
NHJ had an improper machining process resulting in multiple lots scraped before July, with each lot we are talking about 250pcs. I ask you to take these lot scraps into consideration."
There is no other way that FAA/Moog can verify the use of substitute material in this particular part or any other Moog part unless they verify raw materials purchased from the approved vendors first. I made this same request to FAA/Moog repeatedly during my communications in the last 5 months.
Unfortunately, neither Moog nor FAA checked with the approved raw material vendor(s) on the quantities NHJ purchased from them.
Recently, I phoned Mr. SSS of GMT on June 15, 2016, who is the vendor NHJ claims to have bought the materials for part P665A0039-02. During this conversation I asked Mr. SSS if Moog or any US agencies contacted him or his company verifying NHJ material purchase. He stated, "No, they had not."
That prompted me to take action myself on 14th Aug., 2016, and do the verification for 3 lots of materials purchased from Gloria Material Technology; the finding was extremely troubling. NHJ claimed they purchased over 1000pcs while Gloria only sold them 300pcs. Please refer to the email dated Aug 17th by my lawyer Mr. L. (See attached)
It took me only 2 days to identify large quantities of substitute material which was used for 3 NHJ production parts. It might take similar amount of time for FAA or Moog to do the same. We are talking about not just the 3 lots. I am certain NHJ was falsifying material certificates for all Moog parts.
These acts must be addressed by FAA and DOJ jointly and immediately without any further delay.
Secondly, my case is about organized crime, and has great safety impact that requires urgency and priority.
Here is what concerns me:
a. There was no verification of evidence submitted. As I stated above, the way to verify the forged certs(certificates) could be done in asking for LEA(Law Enforcement Agencies) involvement.
b. FAA should have already identified my case as one of the highest importance, which was related to criminal activities, such that you were compelled to seek LEA involvement.
However, as these steps were not taken previously, I am concerned that the FAA will fail to do so now and in the future as well.
c. Due to the fact that this must be a controversial case, why did the FAA not seek FAA legal counsel's participation since the safety threat is more and more imminent? I also do not see why this case is not a priority case as defined in FAA Order 2150.3B.
d. FAA investigators simply overlooked the facts and evidence. It seems from my perspective that the investigators did not ask for testimonies from witnesses despite my pleas.
Having said the above, I ask you and your colleagues to follow the FAA Orders, invite LEA involvement, and request Moog or contact Moog approved raw material vendors for material facts -starting with the 3 lots I identified with Gloria Material Technology.
I request a response from FAA investigators within FOURTEEN (14) Days that you have verified the material facts, including but not limited to all NHJ raw material purchases for Moog parts already delivered.
Thirdly, Appeal to Administrator of FAA and Director of FAA Audit and Evaluation Office.
Bob, or any of the recipients of this email from FAA, could you do me a favor by forwarding this email to the FAA administrator and Director of FAA Audit and Evaluation Office?
I request that FAA take the matter as a top safety threat that calls for a prioritized investigation involving LEA cooperation because it involves the integrity of hundreds of commercial airplanes in service that are compromised.
This is due to the fact that Moog provided safety critical flight control systems which contain counterfeit parts made by a Chinese part supplier and fraudulently misrepresented Moog.
Moog, in the meantime, is refusing to take action to recall the counterfeit parts, and, therefore, is guilty of the biggest scam in aviation history. The safety threat is accumulated and imminent, and could possibly happen at the next moment.
Nothing happened. The FAA investigator did not contact law enforcement for criminal investigation despite the FAA being fully aware of the criminal nature of the matter.
On 10/31/2016, I wrote a letter to Mr. Michael Huerta, FAA Administrator requesting he escalate investigation.
Letter to FAA Administrator 10/31/2016
Federal Aviation Administration
31st Oct, 2016
Re: Request for escalated investigation concerning FAA case number EWB16590
Dear Mr. Huerta, Ms. Gilligan, and Mr. Foushee:
My name is Charles (Chaosheng) Shi. I was formerly employed by the Aircraft Group of Moog Inc. as East Asia Supply Chain Manager. I served in that position for 10 years.
Since January 13, 2016, I have acted as a whistle blower to the Federal Aviation Administration (“FAA”) on an extraordinarily significant aircraft safety matter.
FAA initially assigned an investigator to my case, Robert Fortune, whom I communicated with several times in April. During that time, I requested at least four times that Mr. Fortune verify material facts regarding faulty (Boeing) aircraft parts and informed him of the part numbers he should start with.
However, he ignored my requests. On June 1st, the FAA closed the case without substantiating any violations.
I then submitted new evidence in mid-July and requested through the FAA Safety Hotline that the case be re-opened and re-investigated. The FAA declined my request.
Disappointed but not discouraged, on August 17th I submitted to the FAA Safety Hotline compelling evidence that the Chinese supplier substituted 3 lots of approved raw material with over 700 pieces for a production order of some 1000 pieces of Moog machined parts. The parts in question are critical to the safety of flight control systems of B737s.
These parts are believed to have already been installed in B737 sold to air carriers and now in service. These faulty parts are only the tip of the iceberg.
At that time, the FAA did re-open the case, again with Mr. Fortune as the investigator. As my own investigation effort had produced objective evidence indicating that crime and fraud had occurred and is continuing to occur, I and my US lawyer communicated with Mr. Fortune in an effort to have him notify other law enforcement agencies and thoroughly investigate this matter.
Despite our efforts, we learned from Mr. Al Westrom of the FAA that no progress has been made, despite the fact that it has now been 2 months since we submitted the above mentioned additional evidence.
Our request to FAA is based on FAA’s own procedures for investigating suspected unapproved parts. See FAA Order 8120.16A, Suspected Unapproved Part Program and FAA Order 2150.3B. On 4-3 of FAA Order 8120.16A, Coordinating Criminal Investigation, it states, “If parts have been intentionally misrepresented, criminal activity may be involved, inspectors should refer to FAA Order 2150.3 for additional guidance and information about criminal investigation.”
According to FAA Procedure, a safety matter should be uncovered swiftly. At this point, however, more than two months have passed, and the investigation appears to have made no progress. This is in spite of the grave safety threat posed by the faulty/counterfeit parts that I have repeatedly asked the FAA to look into.
I am writing to you respectfully to request immediate action regarding FAA’s investigation into this matter. I intend also to contact the United States Congress to intervene, given the significance of the violations.
I sincerely hope to hear from you or your representative within the next several days, or within this week ending with November 4th in regards to the status of my request.
For more information on the above, please see the attached files.
In spite of my warning and protest, the FAA obnoxiously shut the door on the criminal investigation.