Massive Chinese Fake Safety Parts Knowingly Installed On Flight Control Systems of Boeing Planes

by Charles Shi about a year ago in travel

LEA's criminal investigation and FAA's airworthiness directives requested. Flying public safety is above all politics!

Massive Chinese Fake Safety Parts Knowingly Installed On Flight Control Systems of Boeing Planes
Summary Statement

I, Charles Shi, worked as East Asia Supply Chain Manager of Moog Aircraft from 2006 for 10 years. Since January 2016 I acted as an FAA whistleblower exposing a safety threat concerning Chinese OEM counterfeit safety parts knowingly installed by Moog Aircraft on flight control systems of some 500 Boeing planes, mainly B737 andB777.

Law enforcement's criminal investigation and FAA's airworthiness directives are requested.

Pursuant to 28 U.S.C. Section 1746 and relevant Chinese laws, I state and declare under penalty of perjury that the following is true and correct, and that I have personal knowledge of each matter and document referenced in below post and links:

This Post Includes Four Parts:

  1. Chinese OEM Counterfeiting Supplier-NHJ
  2. Moog Aircraft Criminal Activity And Cover-up
  3. Boeing joined Moog Forgery And Cover-up
  4. FAA's Abuse Of Power And Inaction

Part 1 Chinese OEM Counterfeiting Supplier-NHJ

A. NHJ was a verified counterfeiter for B/E Aerospace, prior to Moog business.

Between 2009-2013, NHJ had only one aerospace customer-B/E Aerospace who halted NHJ business completely in 2013 due to NHJ excessive falsification of material certification and use of cheap non-aerospace material resulting to B/E's product failures.

The motive of NHJ's using substitute material was that the substitute material was one third or even one half cheaper.

a. B/E Insider Ms. P testified on NHJ counterfeiting in a phone conversation with this whistleblower on 2017-02-02 with two US journalist sitting by my side.

Charles Shi: Oh, They used a material certificate by continued shipping substitute material repeatedly quoting that certificate number?Ms. 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)

(The conversation was recorded (Recording is legal in a criminal case in China) and translated by the reputable US news media. The transcript was admitted into court record by U.S. Department Of Labor administrative law judge Hon. Scott R. Morris)

Exhibit Admitted in Court Record by Us Law Judge Hon. Scott R. Morris at Department of Labor

Exh. RF75

b. 2016-1-7 Former NHJ employee Mr. X, saw with his naked eyes that a few criminally forged company chops of approved aerospace raw material vendors which were used to falsify material certification 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!

Exhibit Admitted in Court Record by Us Law Judge Hon. Scott R. Morris at Department of Labor

c. Mr. S, sale's person of B/E and Moog's approved Raw material vendor, testified:

Mr. S face to face dialogue with Charles Shi 01-05-2016

S: Actually, someone (at 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!

Exhibit Admitted in Court Record by Us Law Judge Hon. Scott R. Morris at Department of Labor

d, Approved Raw material vendor, Mr. S's written testimony 2015-8-20

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.

Exhibit Released by Moog Aircraft Attorney During air21 Discovery Process

Exh. Moog035 page 3

B. Moog Aircraft fraudulently admitted NHJ into approved supplier base.

B/E halted NHJ business completely in 2013 before Moog even knew NHJ. Without conducting a background check, Moog Aircraft quality lead in region, Ms. Claire Starzak admitted NHJ into Moog approved supplier list through fraudulent practice.

Ms. Starzak used to work as a junior quality engineer at Moog UK facility (Moog acquired from GE Aerospace in 2009) and had no supplier audit experience before she came to China in 2012.

In 2014 Ms. Starzak did what she called desk-top auditing to approve NHJ, meaning she approved NHJ from her laptop at her living apartment in Shanghai without going to NHJ, located in another city, for an on-site audit. This practice was a pure violation of aerospace quality standard.

A supplier survey checklist must be used by an experienced Moog auditor in auditing a potential supplier on site, the first question in the list is:

How the supplier documents and maintains material traceability because this is most critical in aerospace business.

Supplier Survey Checklist That Must Be Used by an Experienced Auditor

Ms. Starzak did not even use Moog standard supplier audit checklist in her "Desk top NHJ approval”.

C. NHJ had no aerospace material traceability in its system

NHJ had no aerospace traceability in its manufacturing process. NHJ used an illicit material booking system called MID (Material Identification) throughout its manufacturing process. NHJ's MID system did not have traceability to aerospace material sourced from approved vendors. No aerospace material traceability was recorded at NHJ at all.

If Ms. Starzak used Moog checklist and asked the first questions concerning material traceability, she could possibly identify that NHJ had no material traceability aerospace required (explained in C.) and stopped admitting NHJ into Moog approved supplier base at the very beginning.

More details, please view this video clip (click to view)

Moog Supply chain used an IPT (Internal Product Team) structure composed of Supplier Development Engineers (SDE), Supplier Quality and Manufacturing Engineer (ME), As the regional supply chain manager, SDEs reported directly to me, per Moog work procedure, I should give day to day job orders to SQEs and MEs even they have their own direct reporting lines. However, Ms. Starzak acted always on her own.

Moog became aware of NHJ past counterfeiting issue in May, 2015 when I was alerted by Supplier Development Engineers (SDEs). I asked Ms. Starzak to go to NHJ and conduct product and process audit, she declined.

Since Supplier quality lead Ms. Claire was not doing her jobs, I and SDEs conducted extensive auditing and investigative works on NHJ between June and July, 2015. We identified NHJ used the illicit material booking MID system (Material Identification).

Mr. XXX, the SDE responsible for NHJ did a product audit on NHJ June 3rd, 2015. He wrote a report with the alarming MID finding in RED.

"lot tracking using MID number which is NHJ material identification number...NHJ...only MID in tracking."

Mr. XXX Audit Report Dated 03/06/15

Exh. Moog007 page 5

We found a copy of NHJ own 2015 company presentation, it manifestly stated:

Raw material order number is internal MID

NHJ Company Profile January 2015

Exh. RF57 page 27

After being alerted of NHJ previous counterfeiting in May, 2015, I went myself to NHJ a few times on issue finding trips. On a trip 06/23/2015 , I myself identified a very troubling violation of NHJ who stocked raw material for Moog business in the open area.Material was mixed with no traceability from vendors.

I instructed Mr. XXX to sum up my findings and other major findings of raw material traceability issues in a report "NHJ Improvement Suggestion 6/23/2015" which was shared with Moog team.

NHJ Issue summary report 6/23/2015

Exclusive disclosure

Material used for Moog Business was stocked in open area, mixed and not properly labeled, some material had labeling, some did not.

NHJ Raw Material for Moog Aircraft Stocked in Open Area-1

NHJ Raw Material for Moog Aircraft Stocked in Open Area-2

During 6/23/2015 NHJ audit trip, we found NHJ production documentation and labeling only allowed MID numbers to be recorded. Some Work in Process (WIP) paperwork did not even have MID "traceability", testifying NHJ basically has no traceability in its manufacturing process.

By MID material system and the finding we had, NHJ could use whatever non-aerospace material in manufacturing parts for Moog Aircraft business.

NHJ Production documentation only recorded MID which was not accepted by aerospace quality standard.

NHJ paperwork did not even have MID lot number at production line.

No Lot Number or Even Mid Number for Fai Production

Picture taken 6/23/2015

I made my first Moog internal whistleblowing 08/07/2015 to Mr. Kevin Walek, Global Supply Chain Director of Moog Aircraft, on NHJ suspected counterfeiting and on my direct supervisor Mr. Joe Zou who was supposedly colluding with NHJ. I wrote:

He (Mr. Joe Zou) requested nothing to demand NHJ take actions to correct the traceability Non Conformances, but kept telling us it is normal for a supplier to have such issues!!!
What issues, traceability is the biggest issue that can cause immediate disaster to aerospace business.

No sooner did I make my first whistleblowing than stakeholders in Moog Aircraft, including top management, global supply chain, quality organization and engineering became fully aware of the fact NHJ had no traceability.

D. NHJ faking SPOF blocks(mounting lug) of B737 Spoiler compromising some 500 B737 now in service.

Since 2015 for 2 years, NHJ was the exclusive supplier of blocks of B737 spoiler (Single point of failure or SPOF). This SPOF was focused in my whistle blowing to Moog and FAA during the last two and a half years.

P/N P665A0039-02, Block (Mounting lug) of B737 spoiler actuator, this part is the single point of failure for the component.

Ms. Claire Starzak testified in her report 2015-8-25.

So far 737 spoiler mounting lug (is) identified as ...a single point (of) failure for the actuator.

Ms. Starzak Report to Moog Management 2015-08-25, Exhibit Disclosed by Moog Attorney

Exh. Moog116

I ordered Mr. XXX to conduct another product audit on this SPOF part 2015-8-7 that triggered my Moog whistleblowing.

Mr. XXX came back with alarming findings that NHJ was faking 4 MID lots of 1006pcs with 3 lots of 1016 pcs aerospace material NHJ claimed to have sourced from GMT, an approved material vendor.

The NHJ 4 MID lots, 1006pcs had no traceability to 3 GMT lots of 1016pcs. Since NHJ system only record MID lots, when asked what GMT lots these 4 MID lots were traced, NHJ came up with 3 GMT lots material certification The quantities of 3 GMT lots were close but did not match the 4 MID lots.

Mr.Xxx NHJ Audit Report 2015-8-7

Exh. Moog054 Page 2

In the middle of FAA whistleblowing, I myself investigated on the 3 GMT lots one year after Mr. XXX did his audit, NHJ even falsified the quantities of these 3 GMT lots from 314pcs to 1016pcs. One GMT lot SD1850B-10G, GMT only sold NHJ 112pcs. On NHJ system, it was falsified to 612pcs. 500pcs fake material was substituted even NHJ claim was right in tracing their MID lots to lots of approved aerospace materials.

Moog approved material vendor GMT confirmation of 3 lots sold to NHJ

GMT lot SD1850B-10G, NHJ claimed they purchased 612pcs, GMT only sold NHJ 112pcs.

Exhibit Admitted in Court Record by Us Law Judge Hon. Scott R. Morris at Department of Labor

Exh. RF039-1T

It is believed some 500 B737 have been compromised due to installing this safety critical counterfeit blocks or mounting lug.

Near miss accidents concerning Moog made Boeing plane spoiler block already took place.

Icelandair B752 at Keflavik on February 26th, 2013, hydraulic failure, control difficulties

One of the main cause was:

- the blocking ....cracked, caused spoiler #6 to float

The incident aroused flying public outcry.

John O. on Saturday, Aug 22, 2015, 12:51Z

Well, now they have an "in-flight" incident... Surely the part-manufacturer (Moog) is responsible for their product and for flagging potential failures... I have to ask: "what were these people thinking of?" — just because it never happened before, doesn't mean it won't ever happen.

The B757 spoiler block was made by Moog itself, Moog should have used aerospace material, even aerospace material could crack and cause spoiler to float that in turn could cause the plane uncontrollable, it tells how critical the block or mounting lug is to landing control. In this near-miss incident, there was only one block that broke, think about all 10 blocks on a B737 which used fake non-aerospace material? Fatal accidents are just unavoidable!

For more details, please view this video clip.

Part 2 Moog Aircraft Criminal Activity And Cover-up

Moog quality control system did not have a counterfeit control when NHJ used fake materials to make safety-critical parts for Boeing flight control systems.

A. Moog criminal suspect Mr. Joe Zou himself had zero confidence in the Chinese counterfeiter's traceability.

a The Chinese counterfeiting supplier was introduced to Moog by Mr. Joe Zou, Asian Supply Chain Director in 2014.

Mr. Zou's motive of bringing NHJ in was to receive kickbacks.

A US award winner & independent investigative journalist/producer by his own probing discovered Mr. Joe Zou, Chinese name Zou Yonghua, registered a shell company in Detroit, Michigan where his home was based in 2015. The shell company is suspected of receiving kickbacks from Moog Chinese suppliers.

Shanghai Xing Kong Information Technology, LLC, Shell Company Registered by Mr. Zou in 2015 When He Was Fully Emoployed by Moog

exclusive discloure

b, Mr. Joe Zou actually did not have any confidence in NHJ's traceability himself. In a phone conversation he and I had on 9/29/15 2015, he said very loudly and clearly.

… those parts with traceability, we may do an evaluation, and we sum up the issues in writing and on Monday afternoon, we shall present the issues with him. We ask him to pull resources to re-trace the parts….Because they (NHJ) has committed the mistakes twice. I don’t have confidence in their traceability. I am just concerned the parts on line and being delivered have same issue (traceability).

The recording of full phone conversation (In Chinese) is here.

c, Mr. Joe Zou desperately colluded with NHJ on tampering and destroying evidence after he was aware of my whistleblowing against NHJ and himself. He knowingly disclosed Moog confidential investigation information against his boss's order to Mr. Li Jian, the owner of NHJ.

Mr. Joe Zou was determined to be violating Business Ethics. Mr.Don Needham, HR manager of Moog Aircraft wrote on 9/18/15:

There was enough information to determine that Joe may have been in violation of Moog ethics policies.

Moog Determined That Mr. Joe Zou Violated Moog Ethics, Exhibit Disclosed by Moog Attorney

Exh. Moog099

B. Moog Quality lead person mishandled investigation and infighting on NHJ issues.

a, Before and after I did my first Moog internal whistleblowing in August 2015, battles with corruption of Moog quality organization raged on.

SQE lead Ms. Claire Starzak refused my order to investigate alleged NHJ outsourcing Moog business to unknown and unapproved sub-tiers. She was also not acting upon alarming findings by my SDE team.

I complained to Subu Bhat, director of Moog quality, direct supervisor of Ms. Starzak. Mr. Bhat wrote 25/09/2015 :

...He (Mr. Shi) indicated that the quality issues we have found with...NHJ could have been avoided if Claire had acted on the suggestions made by members of his team, since he has sent two emails to justify his position.

Mr. Bhat Admitting Complaint on Ms. Starzak's Incompetence and Mishandling- Exhibit Disclosed by Moog Attorney

Exh. Moog006 page 1

b, Moog SQE Lead, Ms. Starzak Refused to Investigate NHJ Own Admitted Forgery of Traveler.

After I did my first Moog internal whistleblowing to Global Supply Chain Director Kevin Walek on August 7th, 2015. Kevin took it very seriously. He and VP of Moog Aircraft Quality Jesse Mangual ordered Ms. Claire Stazark to investigate the suspected counterfeiting of Suzhou New Hongji (NHJ) in 3 weeks. However, the job was badly mishandled.

Mr. XXX was SDE responsible for NHJ and accompanied Ms. Starzak during her investigations. Mr. XXX gathered material information that NHJ own quality personnel admitted forging traceability documentation of traveler for a single point of failure blocking of B737 spoiler (The very safety critical part I focused throughout my whistleblowing process).

Exhibit Disclosed by Moog Attorney

Exh. Moog056 page 3

It was appalling Ms. Starzak refused to deep investigate the forgery that could simply lead to finding of NHJ using fake material for that safety critical part.

It was more appalling the reckless, incompetent SQE lead Ms. Claire, on behalf of entire Moog Aircraft and U.S. aviation system re-approved NHJ into approved supplier list giving NHJ to continue shipping Suspected Unapproved Parts (SUPs) to U.S. aviation system.

Exhibit Disclosed by Moog Attorney

Moog gave 30+ Boeing part numbers to NHJ as exclusive sources from 2015-2017, Moog did not and could not replace NHJ at least 8 to 12 months so chose to continue sourcing from NHJ all those SUPs and have them all installed onto flight control systems of Boeing airplanes.

c, Moog top executive intentionally leaked my confidential FAA whistleblowing information to the very suspect, Mr. Joe Zou and endorsed Mr. Zou colluding with the Chinese counterfeiter.

The day after I was wrongfully terminated on 1/14/15, I received two phone calls from my Supplier Development Engineers (SDEs) informing me that Mr. Joe Zou was alerted of my FAA whistleblowing and Mr. Zou was ordered (by Ms. Schaefer, VP of Supply Chain, Moog Aircraft) to lead "a new Moog investigation" before FAA came.

Below is the transcript of phone conversation 01/14/2016 I had with Mr. XXX who was the NHJ responsible Supplier Development Engineer (SDE).

Exhibit Admitted in Court Record by Us Law Judge Hon. Scott R. Morris at Department of Labor

Exh. RF11-1S

d, Cryptic Message of Death Threat by the Chinese Counterfeiter

Since I risked my life whistleblowing to Moog/Boeing/FAA, I have been living in hiding and my family has been suffering with me!

Judy Zhu, NHJ customer manager of Moog project, sent me a wechat message shortly after I was terminated, which was a cryptic message of a murder threat.

Mr. Li sent a message to you little time ago, you did not respond, so (he was) concerned of you..

Cryptic Death Message by NHJ 03/15/2016

Exclusive disclosure

I reported to Chinese law enforcement of the death threat. But I am not sure my life can be saved if the counterfeiting crime is not dealt with!

Part 3. Boeing Joined Moog Forgery and the Cover-up

A, Boeing has been misleading NBC journalists and flying public by repeating Moog Deceit and FAA abusive investigation results even though Boeing was fully aware of NHJ counterfeiting.

Boeing has a big presence in China. There are dozens of Chinese speaking quality people at their Chinese offices. Boeing could have investigated alleged NHJ counterfeiting here in China back in February, 2016 when I also whistle blew to Boeing Ethic Hotline. They could have checked with B/E witness and other witnesses both within and outside Moog because all witnesses work for entities Boeing was a customer. Boeing could have sent their own competent investigators to NHJ by checking and verifying my allegations amid FAA's inaction.

Boeing could, of course, have uncovered the systematic crime of counterfeiting their safety parts in such a degree, or they could sue me for damaging their reputation by wide public spread of the matter. But Boeing did nothing except backing up Moog's deceits:

B, 1/3 Moog business given to NHJ was outsourced to unknown and unapproved sub-tiers. Thousands of pieces of SUPs, many of the safety-sensitive or safety critical, were installed by Moog onto Boeing planes.

Moog SDE Testifying Moog Business Was Completely Outsourced by NHJ Without Moog Knowledge;Exhibit disclosed by Moog attorney

Exh. Moog056 page 7

No single piece of SUP was replaced or recalled posing safety risks to flying public.

C, Four-part number of safety-sensitive B777 spoiler, over 1500 piece parts were unbaked after Cadmium plating. It was causing hydrogen embrittlement that could cause planes to lose control and crash during landing.

The problem was more serious than what Moog lied about.

Moog/Boeing Joint Action—Problem Was Fully Known by Moog & Boeing-Moog Internal Memo; Exhibit Admitted in Court Record by Us Law Judge Hon. Scott R. Morris at Department of Labor

Exh. RF66 accepted into Court record

It is deplorable that, for the sake of self-interest at the expense of flying public, Boeing accepted Moog's lie, endorsed by FAA, willfully kept the bogus safety-sensitive parts to remain on B777 spoilers, compromising some 15-20 B777 now in service.

Part 4. FAA Abuse Of Power And Inaction

A. FAA Shuts The Door On Criminal Investigation Of Chinese Counterfeiting No Matter What Warning Was Given (click to read)

It is very clear counterfeiting is a crime and the matter I whistle blew required FAA, per its own procedure, to contact law enforcement agencies (LEA) for a criminal investigation. However, FAA refused doing so!FAA's Obstruction Of Justice is terrible and incomprehensible.

B. The FAA investigation was meant to cover up

A few examples to support my claim:

a,FAA-accepted Moog deceits ONLY, one of them is:

NHJ only makes simple parts for Moog.

Moog deceit was designed to have the flying public feel the safety threat was modest and can be neglected even exposed.

FAA Report on June 1, 2016, Accepting Moog Deceit of NHJ Making Simple Parts

The fact is: Throughout my whistleblowing process, I focused on that Single Point Of Failure(SPOF) blocking or mounting lug of B737 Spoiler.

b, Without conducting any independent investigation or verification with objective evidences,FAA-accepted Moog deceits one after the other.

Moog created new forgery to make up GMT material lot quantity mentioned in Part 1, point D. by adding a 4th lot SC282A5-10G ), but the forged 4th GMT lot accepted by FAA was nonexistent.

A US senior investigative journalist contacted GMT to verify the 4th lot Moog/FAA attempted to make up the quantities NHJ falsified. GMT Aerospace Sales Director Jacky Chiu responded 09/11/2017.

SC282A5-10G April 20, 2015 (This is not an existing No. in our production. We produced SC0282-..but do not produce SC0282A5-.. There is no SC1282A5-..either. And SC0282- is material 440C instead of 15-5PH.)

NHJ/Moog/FAA Added the 4th GMT Heat Lot Which Was Non-Existent

Exh. RF84

B. FAA Investigator Was Worse Than Not Knowing What He Was Doing

a, The FAA investigator could not understand that NHJ counterfeiting was a crime.

b, The FAA investigator knowingly manipulated the violations which were substantiated.

c, The FAA investigator did not follow up NHJ counterfeiting even when they were caught.

C. FAA Inaction on Counterfeiting Safety Boeing Plane Parts Is Arousing Public Outcry

Let us hear outcries from aviation professionals and flying public.

This is outrageous and criminal in nature! Thanks to the whistle blower. I hope FAA is forced to act and extend investigations to other major suppliers and their supply chains.

- Gary McCartney, President and CEO AviationHubAsia Inc.

In closing this post, flying public should be aware of that the matter is about NHJ counterfeiting not just a few lots of Moog business or just a few Boeing part numbers. It was a systematic and organized counterfeiting of overall Moog business.

Moog quality organization was corrupted by relying on the reckless and incompetent SQE Ms. Claire Starzak who failed to identify that NHJ had no material traceability in the first place. When NHJ counterfeiting was exposed, the entire Moog Aircraft continued to rely on her handling the investigation which was a failure.

Moog top management chose to cover up by endorsing the internal suspect's collusion with NHJ in tampering and destroying evidence.

Moog continued knowingly to source NHJ's SUPs even after my whistleblowing putting business above flying public safety.

When Boeing was aware of the counterfeiting and Moog fraud, Boeing chose to join Moog's cover-up.

When FAA was alerted, neither did FAA conduct an independent investigation, nor did FAA contact Law Enforcement to have the crime investigated.

Therefore the cover-up is massive and extraordinary. The time bomb is ticking!

There should be no more delay of a criminal investigation if it was not launched already. FAA's Airworthiness Directives must be issued for complete removal of fake safety parts from all Boeing planes. Safety should be above all politics!

Flying public, please join me crying out for action!

Please feel free to contact me at:

Charles Shi

Twitter

Facebook

Youtube

Linkedin

Google+

Tumblr

travel
Read next: Eliminating Bail
Charles Shi

Charles  Shi. formerly employed by the Aircraft Group of Moog Inc. as East Asia Supply Chain Manager,a whistleblower of the Federal Aviation Administration (“FAA”) on an extraordinary Boeing plane safety threat.

[email protected]

See all posts by Charles Shi