Charles Shi is the former Far East Supply Chain Manager for Moog Aircraft Group in China. Since 2016, Shi has filed a series of complaints with the Federal Aviation Administration claiming Moog, a top-tiered supplier to Boeing, knowingly sourced substandard components from another Chinese supplier, NHJ.
According to Shi, Boeing and Moog discovered the counterfeiting and conspired on the cover-up. Currently, NHJ no longer provides services to the aerospace industry. In Tarbell’s coverage earlier this month, When is the last time you were on a Boeing 737? neither Moog nor NHJ would provide comment on the matter.
From his home in Shanghai, Charles sat down with Tarbell this week to “tell-all” and discuss his role as “industry-whistleblower”.
1. Why do you accuse the FAA of not passing your allegations to law enforcement agencies for criminal investigation?
Shi: The counterfeiting of Chinese supplier-NHJ and Moog aircraft was widely known to Collins Aerospace (B/E Aerospace), Moog, Boeing, the FAA as well as to Chinese law enforcement.
In 2017, a Collins witness testified that NHJ counterfeiting was massive and organized by its owner, Mr. J. Li. An NHJ employee saw a few fake stamps used to forge material certificates and an aerospace raw material vendor confirmed NHJ plotted to buy 20kg aerospace material, mix 80kg substandard material and then forge a certificate stating 100kg material purchased from the approved vendor.
Reuters journalists have seen the Moog memos and transcripts of witness in its report: “Fake paperwork, poor parts challenge China’s aerospace boom”
According to the FAA order, the matter must be forwarded to LEA for criminal investigation. The reputable U.S. publication Crime Report pointed it out in a breaking story in 2017 with “Who’s Policing Counterfeit Airplane Parts?”
The FAA and the U.S. Department of Transportation consistently refused to forward it to law enforcement agencies for criminal investigation per their own rules for such an extraordinary case of Suspected Unapproved Part (SUP).
A Washington based watch-dog organization got a FAA SUP record between 2014-2018 via FOIA, among the 223 SUP cases, the matter of NHJ counterfeiting was recorded, but it was taken off the record and was knowingly mishandled by the FAA without forwarding it to the LEA.
My complaint # is EWB16590
The FAA also didn’t respond to my most recent complaint with fresh discovered compelling evidence. “Will Boeing Remove Chinese Fake Critical Parts for Safety?”
Without a real criminal investigation, the Chinese counterfeiting and Moog fraud was still being covered up.
2. Can you elaborate on Moog Aircraft and Boeing knowingly sourcing substandard aerospace parts from Chinese supplier-NHJ?
Shi: The verified counterfeiting Chinese supplier-NHJ had a complete loss of material traceability by using its own material system that did not trace back to raw material purchased from the approved aerospace material vendors.
Moog’s audit in 2015 identified NHJ and its sub-tiers, which were unapproved, did not have a system required by aerospace to maintain traceability and quality. All parts made by NHJ should be recalled or replaced as Suspected Unapproved Parts (SUP).
NHJ was subcontracting 11 Boeing part numbers which was 1/3 of Moog business sourced from NHJ to sub-tiers before it was known and approved by Moog. The violation was discovered by a Moog supplier Development Engineer (SDE) reporting directly to me after thousands of piece parts already were delivered.
Moog knowingly assembled all those SUPs into flight control systems of Boeing planes at a time Boeing was pushing deliveries and Boeing was aware of the fraud but knowingly did not take action to replace any of them.
3. How was the matter knowingly mishandled by the FAA? Do you have proof?
Shi: The FAA only visited a Moog facility in the U.S. The FAA did not come to China to interview witnesses or investigate NHJ directly or asked Boeing who had large SQE team based in China to investigate on behalf of the FAA. The FAA investigation was a hoax.
The FAA misinformed Tarbell stating, “Investigators selected random parts and tested them, all parts conformed 100 percent to the material composition specifications outlined in the engineering drawing requirements.”
Moog testing on sample parts was a test by X-ray that can only determine the composition but did not mean the material was an aerospace grade because material of same composition will perform drastically different if not heat-treated to aerospace specification.
The non-aerospace grade material is much cheaper than that of aerospace grade. To determine if a material is aerospace grade, a durability test which is destructive must be performed. Moog, Boeing and the FAA never completed such a test.
The FAA also told Tarbell “investigators also conducted a traceability review of the raw material certificate of conformances on lots delivered since October 2014”.
The FAA or the Moog investigator traceability review was based on the fake raw material certificates forged by NHJ because they used a “material certificate” bearing its own company logo to ship Boeing parts to Moog.
The Chinese police showed me copies of NHJ fake raw material certificates in a 2019 meeting but refused to give me copies.
The FAA investigator either did not know what he was doing, or he knew NHJ titled material certificates were fake but knowingly covered it up. I am requesting Moog to disclose all or any of NHJ raw material certificates when they shipped parts to Moog in the air21 legal suit.
I hope the US labor tribunal will compel Moog disclosure for the good of public safety. “U.S. And China Must Strengthen Cooperation to Combat Counterfeiting”
The FAA also told Tarbell “In one case, investigators substantiated a problem with a cadmium plating supplier, and the impacted parts in stock and in-production were quarantined, she said. The suspect parts were then tested to assess the risk of failure. Based on the test results, Moog recommended a disposition of “use-as-is.” Boeing accepted Moog’s recommendation because the issue did not constitute a safety-of-flight concern. “
In fact, the FAA substantiated two violations. The other one was about the NHJ subcontracting Boeing safety parts to unapproved sub-tiers mentioned earlier. Regarding the unbaked 777 spoiler safety parts after cadmium plating causing hydrogen embrittlement, this is exactly a similar case of ill baked parts of 737 slat tracks which the FAA is seeking to fine Boeing a total of $9 million for substandard parts that could become brittle and weak.
That case was disclosed only after two Max crashes arousing tremendous public outcry while NHJ case was two years before the crash, according to the same standard, the FAA must ask Boeing to remove all admitted 275 dangerous parts (actual quantity was more than 1500pcs) on 777 spoilers and fine Boeing for keeping them on board for so long.
The FAA said they closed the matter because “our investigation determined Boeing and Moog took the proper corrective action based on the findings.”
In fact, Moog or Boeing did not take even investigate NHJ or take any real action to recall or replace NHJ counterfeit parts voluntarily so far.
NHJ was caught falsifying quantities of raw material purchased from an approved vendor GMT, one GMT lot was falsified from 112pcs to 612pcs for a Single Point of Failure (SPOF) of 737 spoilers. The fraud alone compromised some 500 unit of B737 planes now in service.
On a confidential Moog audit, Mr. S. Shao, who reported directly to me, captured NHJ falsifying a GMT lot SD1850B2-10G from 112pcs to 612pcs.
GMT salesman, Mr. W. Wei confirmed in a Chinese interview 2019-3-29 that lot SD1850B2-10G is 112pcs.
Mr. S. Shao, who conducted Moog audit in 2015, admitted to the Chinese police in April 2019 interview that he learned the SD1850B2-10G quantity is only 112pc only when police showed him GMT evidence.
NHJ knowingly counterfeiting 737 SPOF was reported by U.S. media, such as this article summed up by a reputable U.S. plaintiff law firm.
According to The Epoch Times, the greatest concern to Mr. Shi are that many of the parts made by third-party Moog supplier Suzhou New Hongji Precision Parts Co. (NHJ) are “safety sensitive” and one is “safety critical.”
NHJ part number P665A0039–02 is the blocking or mounting lug of the Boeing 737’s spoiler – a “Single Point of Failure (SPOF)” part. “If this part fails, the entire system will fail, which may cause a fatal accident,” The Epoch Times reported.
4. How did Chinese law enforcement react to your criminal complaint?
Shi: Chinese Suzhou police refused to bring charges to NHJ even after they verified their counterfeiting. Police also tampered with the witness and silenced others who would speak up because while the criminal investigation was on-going, Suzhou police gave NHJ case files to the company to support its “defamation” lawsuit.
The case files included a confidential document written by me on advising police how to investigate NHJ, which witnesses to be interviewed, the steps, method to investigate, from the perspective of an international aerospace professional and technical requirement since local police has no expertise at all.
Released case files also include some key witness interrogatories containing personal information such as telephone numbers, addresses, witnesses which should be kept strictly confidential in any case. The Suzhou police even yelled at me that NHJ counterfeiting might not be a crime in the April 2019 meeting.
When I complained about the police misconduct and requested an open hearing on the mishandled investigation, I was informed by the prosecutor that NHJ counterfeiting was a “state secret” so the case could not be reviewed or heard publicly.
There was an exit ban imposed on me not allowing me to travel to U.S. to attend Boeing Safety Issue hearing since September of 2019. I was warned by authorities not to talk to press or media on Chinese police or judicial organ’s mishandling.
I raised complaints to Chinese authorities on the cover-up from local executive and judicial organs all the way to President Xi jinping last year, but to to no avail. I recently filed a new complaint to the Chinese Communist Party Discipline and Supervision commission(CCPDSC) of Suzhou city requesting a thorough investigation on the Suzhou law enforcement and judicial organs fraud in covering up NHJ counterfeiting because counterfeiting is a crime by Chinese law and counterfeiting aircraft safety parts will compromise aircraft safety.
5. How can the safety threat be removed?
Shi: The U.S. and China trade agreement signed in January, Article 1.19: Counterfeit Goods with Safety Risks stipulates very clearly: “The Parties shall endeavor, as appropriate, to strengthen cooperation to combat counterfeit goods that pose …safety risks.”
I appeal to the FAA to coordinate a real criminal investigation by U.S. and Chinese agencies with no further delays, hopefully to stop another Boeing plane crash involving Chinese-made substandard parts.
I appeal to Chinese authorities to lift the exit-ban and allow me to travel to the United States for public hearings, to not only ensure the safety and freedom for me as the whistleblower, but to speak in accordance with the Chinese Constitution and relevant laws.