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The counterfeit safety parts of flight control systems were made by a Chinese supplier-NHJ and were knowingly sourced by Moog Aircraft over two years since 2015 compromising some 500 Boeing planes, mainly B737 and B777.
One of the chief causes that massive counterfeit parts could find their way into Moog Aircraft supply chain and finally installed on Boeing planes was: There was no control at Moog Aircraft when these counterfeit parts were made and installed!
This was firstly evidenced by Honeywell's lawsuit in 2014, accusing Moog of breaking a supply contract by providing defective inlet guide vane actuators, or IGVAs, that contained unapproved seal materials.
Moog Aircraft did not take the lesson learned from the Honeywell case, nor did Moog begin tightening supplier quality controls just in time that could have effectively stopped or avoided the criminal activity that NHJ falsified material certification and used poor and cheap substitute material for Moog business.
The Moog Supplier Quality Requirement(SQR-1) is the Bible for suppliers. It prescribes the rules all suppliers must obey when supplying parts to Moog. Over the years, this SQR-1 has been revised many times.
One of the measures to stop fake material coming into the supply chain is to require that machining suppliers submit Certificate of Conformance(CoC) or authentic copies of CoCs obtained from raw material vendors for each and every shipment they delivered to Moog. This has been a pretty established quality standard in the aerospace industry.
However, this CoC was not required by Moog Aircraft when I did my first internal whistleblowing in 2015, nor was such a requirement implemented even way after I was wrongfully terminated in early 2016.
The 2010 version of SQR-1, which was used for many years, required suppliers to retain records of material certificates only (No CoCs were required to be sent to Moog).
Moog required:"Suppliers shall retain verifiable objective evidence of....raw material certifications and certificates of conformance for a minimum of then years.."
Moog made a revision on May 05, 2016(four months after I was wrongfully terminated for reporting NHJ counterfeiting) by adding "counterfeit parts prevention".
Moog added "counterfeit parts prevention" in 0505/2016 SQR-1 Revision.
In this revision, it still failed to require suppliers:"to accompany the shipment of products with raw material certificates to Moog."
As the fallout of my continued whistleblowing, Moog finally realized the fundamental defect in its SQR-1 requirement so changes were made in the latest version of March 2018 that "All raw material certifications, test reports, inspection reports, or other traceability documents in compliance to S275 requirements shall accompany the shipment of products to Moog."
This is a correct, welcomed change!
But what about the thousands of piece parts which were already installed on Boeing planes? Compelling evidence indicated that NHJ manufactured them by falsifying material certification and using fake material. Moog continued to refuse recall or replacement.
It is most unfortunate that Boeing and FAA joined Moog in covering up the extraordinary Boeing plane safety threat.
When sourcing parts at NHJ, Moog never asked NHJ to submit material certificates, either original or a certified copy until late September 2015, one month after I did my first internal whistleblowing, Moog started asking NHJ to send copies of material certificates along with shipments.
Even though fully aware of NHJ's past felony of falsifying material certification with B/E Aerospace, Moog did not verify the authenticity of any of the material certificates which were only "copies" prepared by NHJ themselves.
NHJ was brought into Moog supplier base by Mr. Joe Zou, my direct supervisor, after I complained his misconduct colluding with NHJ, Mr. Kevin Walek, Joe's boss, had a counsel session Sept. 8th, 2015 with Mr. Joe Zou.
It was written: "Employees had raised concerns regarding material control at NHJ after learning that B/E had discovered a raw material substitution problem, This initial employee concern was not acted upon."
Moog didn't investigate Mr. Joe Zou's unethical activities at Moog and did not fire Mr. Zou even when it was determined Mr. Joe Zou violated Moog ethics. This was a clear manifesto Moog Aircraft did not care about counterfeiting!
Let us review some of the witness testimonies of how NHJ was falsifying material certification and use of bad materials for aerospace business.
1. B/E Insider Ms. P testimony 2017-02-02
C. Oh, They used a material certificate by continued shipping substitute material repeatedly quoting that certificate number?
P.Yes, they used copies of certificate by shipping material not meant by those certificates.
P: I still had a few contacts of previous employees of NHJ... They themselves said to me, they were the "counterfeiting brigade". If caught, they would be arrested and ended up in jail....
C: What do you think who was doing the counterfeiting at NHJ? Were the employees themselves or they were directed by...?
P: Of course their boss, Mr. Li (Li Jian, the owner of NHJ)
2. Former NHJ employee Mr. X, saw with his naked eyes that a few criminally forged fake company chops of raw material vendors at NHJ.
C: I just want to certify it, if he (Mr. X) had seen several, not one chop of the material suppliers, he did say that, didn't he?
Y: Yes, Yes, Yes!
Mr. Y testifies Mr. X saw fake chops at NHJ on 01-07-2016.
3. Approved Raw material vendor Mr. S. testimony
A) Dialogue with Charles Shi 01-05-2016S: Actually, someone(NHJ) makes 100pcs of parts, they might use 20pc material supplied by us, the rest majority material from other(unknown source)
C: Then NHJ forged your certificate to say all material was supplied by you?
S: Yes, Yes, Yes!
Mr. S testifies on 01-05-2016.
B) Mr. S written testimony on 08-15-2015
Mr. S wrote:
In 2011, New Hong Ji(NHJ)'s key customer, an aircraft interior manufacturer(B/E Aerospace) ...found more and more products fail due to using improper raw materials in the parts supplied by NHJ....
Terminate one of NHJ's raw material supplier who was caught forging mill certificates.
a) NHJ used a illicit MID number traceability of material in its production system disconnecting with material lots sourced from approved vendors.
b) When NHJ was caught that quantities (1006pcs) of its MID lots did not match that of approved vendor's (GMT) heat lots, NHJ falsified GMT heat lots quantities (1016pcs) against 314pcs GMT actually sold to NHJ.
NHJ falsified One GMT heat lot SD1850B2-10G with quantity from 112pcs to 612pcs.
NHJ was telling Mr. X of Moog SD1850B2-10G was 612pcs.
However, GMT salesperson testified GMT only sold NHJ 112pcs for heat lot SD1850B2-10G.
NHJ used its past criminal method faking Moog business. The Moog part caught faking was the single point of failure blocking of B737 spoiler that NHJ was the exclusive supplier over two years from 2015 compromising at least 500 Boeing B737 now in service.
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