Falsified Inspection Reports Leads to Company's Demise

What can happen because of forged signatures? Well, it can cause a company to fail and 35 employees to lose their jobs, for one. If the forgeries involved inspections of high-tolerance machining for flight critical aerospace parts used to build space flight vehicles, the outcome could be much more catastrophic.

The Justice Department announced charges against a quality assurance engineer at PMI Industries in Rochester New York for falsifying inspection reports for those kinds of parts. The company had contracts with SpaceX and other Defense Department aerospace contractors including SpaceX's Falcon launch vehicle family and the Dragon spacecraft family. Falcon and Dragon both deliver payloads into earth orbit for NASA, Air Force and other Governmental agencies.

In January 2018, SpaceX asked SQA Services Inc to perform an internal audit of PMI's quality control program. SQA is a company that specializes in quality assurance functions throughout the aerospace and other industries. The SQA audit revealed that PMI had falsified multiple source inspection reports and non-destructive testing (NDT) certifications on flight-critical parts. Source inspections and NDTs are key tools used in the aerospace industry to ensure manufactured parts comply with quality and safety standards. Specifically, SQA found that the signed source inspection reports had forged signatures of the SQA inspector.

One thing led to another, NASA was advised and its Inspector General opened an investigation. Ultimately, the OIG found 38 falsified source inspection reports and 76 individual piece parts that were rejected during source inspection but shipped to SpaceX nevertheless.

SpaceX terminated its contract with PMI which had to close its doors laying off 35 employees in the process. The quality assurance engineer is facing up to 10 years in prison and a $250,000 fine (though undoubtedly, actual punishment will be much lighter).

When one of the engineer's bosses asked him why he did it, the engineer replied that he just "wanted to ship more product for the company".

The full Justice Department press release on this case can be accessed here.