Sylmar Firm Charged With Allegedly False Parts Tests

The Justice Department charged a Sylmar jet engine parts company, McHaffie Inc., and its president on Thursday with conspiring to defraud the government by perpetrating a false testing scheme on parts for the B-1 bomber, the F-18 fighter plane and other military aircraft.

The conspiracy lasted eight years, beginning in 1979, and involved numerous contracts that McHaffie had over that period with the Air Force, the Navy and the Department of Defense, according to court documents.

“This was a major fraud on the government in terms of the number of years involved and the potential for putting defective bolts in strategic military aircraft engines,” said the prosecutor, Assistant U.S. Atty. Stephen A. Mansfield.

Mansfield said, however, that so far there have been no reported engine failures as a consequence of defective parts.

Criminal charges of conspiracy and filing false statements with a government agency were lodged against McHaffie Inc. and its president, Norman D. McHaffie, 56, of Sylmar. The government brought the same charges against James Hicks, 45, of Sepulveda, the company’s former quality control supervisor, and William Whitham, 37, of Lancaster, the company’s former production shop manager.

The Justice Dept. alleges that the defendants failed to test engine bolts as required under its government contracts and then submitted fraudulent certifications falsely stating that the bolts had been tested and met the contract specifications.

The company’s contracts required that the engine bolts pass tests for tensile strength, stress rupture and fatigue, among other things. The government alleges that Norman McHaffie instructed Hicks and Whitham not to test bolts and to create fraudulent test certifications.

Court documents also state that after the government became aware of the scheme McHaffie and Hicks destroyed falsified documents to conceal the scope of the fraud from government auditors.

In addition to the B-1 and F-18 work, McHaffie supplied bolts for use in the Air Force’s A-7 Corsair II jet attack fighter, the Navy’s F-14 fighter and the Air Force’s F-16 fighter. Mansfield said the company had $11.4 million in government contracts during the eight years of the alleged fraud scheme.

Last May, investigators from the Defense Department and the FBI raided McHaffie’s Sylmar plant in connection with a probe into alleged substandard parts. At the time, Norman McHaffie said the company was not under investigation. However, officials of General Electric Co., which had contracts with McHaffie, said government officials told them that McHaffie was under investigation.

Officials from both GE and Boeing, for which GE makes engines, said that they had discovered no defects in their own testing.

The case was filed by what is known as an information, rather than by a grand jury indictment. Generally, that means that the defendants have agreed to plead guilty to at least some of the charges.

The Times was unable to reach any of the defendants for comment. Jason Kogan, McHaffie’s lawyer, said he had not seen the information yet and thus could not comment on it.

The defendants are scheduled to be arraigned April 9, Mansfield said. He said the company faces a maximum fine of $1.5 million. He said Norman McHaffie faces a maximum sentence of 15 years in prison and a $750,000 fine. Mansfield said that Hicks and Whitham, who cooperated with the government in its investigation, each face a maximum sentence of 10 years in prison and a $500,000 fine.