Whistleblower Faces Retaliation for Exposing Counterfeiting of Aerospace Parts in China

Whistleblower Faces Retaliation for Exposing Counterfeiting of Aerospace Parts in China
Shi Chaosheng, also known as Charles, in front of the Suzhou city procuratorate in Suzhou, Jiangsu Province, China, on Oct 12, 2019. (Courtesy of Shi Chaosheng)

After the former East Asia supply chain manager for U.S. parts manufacturer Moog Aircraft reported suspected counterfeiting by a Chinese supplier to authorities, he has continually faced threats from police in China.

After providing local police with supporting evidence for his allegations, Shi Chaosheng found himself sued by the Chinese company for defamation, with the materials he had provided to the police.

The police refused to press charges against the Chinese firm, warned Shi to stop speaking to the press, and banned him from traveling to the United States.

The Chinese manufacturer is New Hongji Precision Parts Co., Ltd. (NHJ), based in the city of Suzhou, Jiangsu Province in China. According to Shi, NHJ knowingly supplied Moog with substandard, counterfeit aerospace parts.

Shi also claims that U.S. aircraft manufacturer Boeing used faulty Moog parts in its 777 and 737 planes, and is worried they pose a danger to the flying public. His whistleblowing had been previously reported by The Epoch Times.

In September 2016, the U.S. Federal Aviation Administration (FAA) investigated Shi’s allegations. Some were found to be substantiated, while others not. The investigation found that “273 discrepant parts delivered to Boeing were installed into spoilers [a device for reducing lift on planes] on the Boeing 777 aircraft.”

When contacted by The Epoch Times, Boeing said via a spokesperson: “The FAA investigations, as well as Boeing and Moog, found no evidence of a safety risk related to these allegations. Any claim otherwise is false. The Moog parts Shi references in his complaint to the FAA are not on the 737 MAX.”

NHJ did not respond to requests for comment.

In a series of follow-up interviews with Shi, he told The Epoch Times his experience with Chinese law enforcement agencies after he reported NHJ to the police in June 2018.

After providing the Suzhou police with evidence including conversation recordings, witness contact details and recommendations on how to investigate NHJ due to the case’s technical complexity, he was informed on April that the police refused to press charges against NHJ due to lack of evidence.

Notice from Suzhou police on their decision not to press charges against NHJ, on April 4, 2019. (Courtesy of Shi Chaosheng)
Notice from Suzhou police on their decision not to press charges against NHJ, on April 4, 2019. (Courtesy of Shi Chaosheng)

Shi contacted the police and found they made the decision without speaking to the key witnesses he recommended. The police had also verified the quantity of raw materials supplied to NHJ by certified aerospace raw material supplier Gloria Material Technology (GMT). According to Shi’s estimate, that quantity was less than half of the units that were required to manufacture the single-point-of-failure parts that NHJ supplied to Moog, based on NHJ’s own production records.

Shi said this was “the key criminal fact,” and the police had just verified that.

He appealed against the police’s decision not to press charges against NHJ, and in the following month, on May 20, he received a letter from the police stating they were extending the preliminary investigation because the case was important and complex.

Suzhou police decision to extend investigation due to its importance and complexity. (Courtesy of Shi Chaosheng)
Suzhou police decision to extend investigation due to its importance and complexity. (Courtesy of Shi Chaosheng)

NHJ sues Shi

On June 28, 2019, Shi received a summons to appear in Suzhou court to defend against defamation charges NHJ had brought against Shi. The summons was dated May 5, 2019.
Suzhou court summons Shi for court hearing on July 25, 2019. (Courtesy of Shi Chaosheng)
Suzhou court summons Shi for court hearing on July 25, 2019. (Courtesy of Shi Chaosheng)

When Shi checked with the court to find how they could press civil charges against him when the police were still investigating the company’s alleged counterfeiting activities, he was told by the court clerk that NHJ had obtained materials about him from the police. Shi checked with Suzhou police and they told him they were ordered by the court to release the case files to NHJ.

Shi found the material they had included information that he had passed to the police and his recommendations on how to investigate NHJ. The police also passed to the NHJ the witness testimonies they had collected and personal data of the witnesses like their personal IDs, telephone numbers, and addresses.

Calls to Suzhou court and NHJ for comment were unanswered. NHJ also did not respond to emailed requests for comment.

Police: Counterfeiting Not Necessarily a Crime

On July 4, 2019, Shi met with the police, where he was shown raw materials certifications from NHJ. Shi pointed out that NHJ was a manufacturer that used these raw materials; how could it produce its own materials certifications?

The police also showed Shi the witness testimonies they had obtained. One of the key witnesses said that she stood by what she said to Shi back in Feb 2, 2017: that NHJ knowingly falsified materials certifications and their ex-employees admitted to her that they were the “counterfeiting brigade” and knew that they would go to jail if caught. The Epoch Times reviewed an audio recording of the witness attesting to the information.

To that, the police said “NHJ counterfeiting was not necessarily a crime,” according to Shi.

He requested the police to consult with aerospace material experts based in China to verify and validate his claim that NHJ had forged the material certificates, but his request was rejected.

Later on August 5, Shi received a letter from the police saying that they have decided not to press charges against NHJ.

Notice from Suzhou police affirming their earlier decision not to press charges against NHJ, on Aug 5, 2019. (Courtesy of Shi Chaosheng)
Notice from Suzhou police affirming their earlier decision not to press charges against NHJ, on Aug 5, 2019. (Courtesy of Shi Chaosheng)
Suzhou police were contacted for comments regarding Shi’s allegations but refused to speak about the issue over the phone. They said sensitive matters like this had to be discussed in person.

Shi Escalates Case to Suzhou Procuratorate and Files Appeal to Chinese Leader Xi

Shi appealed to the Suzhou procuratorate (which oversees the police) on August 8, 2019, protesting that the police twice refused to bring charges against NHJ; police had leaked the materials he provided them to NHJ; and acted as a ‘protective umbrella’ for NHJ.

Due to the technical complexity of the case, Shi suggested to have a public hearing with key witnesses and aviation experts to assess the evidence, and was told on October 10 by the procuratorate’s chief prosecutor that the case was a “state secret” and thus not suitable for a public hearing.

During a meeting on October 12, Shi challenged the chief prosecutor, saying that NHJ was a private company suspected of counterfeiting foreign aerospace parts. Thus, how could it be a state secret? If the case were a state secret, then the police knowingly releasing case files to NHJ would be an even greater crime. She then said she was not certain whether it was a state secret.

Shi requested the procuratorate send him a statement of their decision regarding his case but has yet to receive a reply.

Suzhou procuratorate did not respond to calls and email requesting for comment.

Shi also filed an appeal to Chinese leader Xi Jinping on August 9, requesting that Suzhou police be investigated for the way they handled the case and acted as a protective umbrella for NHJ.
He received a reply from Suzhou police on August 16, and was told they were handling his appeal. He said this is a direct violation of the law: the subject of the complaint should not be the one handling the complaint itself. The police advised him if he was unhappy with their decisions, he could either appeal or lodge a complaint with Suzhou procuratorate.

Police Impose Travel Ban and Warns Shi Not to Speak to Press

Shi told The Epoch Times he was invited to a U.S. airline safety hearing on October 17, 2019, but was informed by the police that he was banned from overseas travel. The police also warned him to stop speaking to the press.

He appealed against the ban, arguing that his trip was non-political in nature and for public safety. But his request went unheeded.

The police did not respond to request for comments.

No Interest From Media in China

Shi said he had approached Chinese media about his story but received no replies, except the state-run broadcaster, China Global Television Network (CGTN), which contacted him on April 8, 2019 and offered to interview him. However, CGTN canceled the day of the scheduled interview, due to “the weather.”
CGTN cancels interview with Shi due to the weather, on Apr 9, 2019. (Courtesy of Shi Chaosheng)
CGTN cancels interview with Shi due to the weather, on Apr 9, 2019. (Courtesy of Shi Chaosheng)
In contrast, his story was picked up by Western and independent media such as Reuters, The Crime Report, NBC, The Conservative Daily Post, law firm Beasley Allen and most recently, Tarbell.

Risking His Life to Blow the Whistle

Shi first blew the whistle and informed Moog, Boeing, and the U.S. FAA back in 2015 to 2016. But it was two years before he would report NHJ to local Chinese authorities, in mid-2018.

“I knew it was a risk of life at the very beginning to deal with Chinese judicial organs,” Shi said.

“That was why it took me two years to file a criminal complaint on NHJ, after the FAA and IG (Inspector General) of DOL (U.S. Department of Labor) consistently refused to launch a criminal investigation (into Boeing and Moog).”

After he first met with Suzhou police to brief them on the case on March 5, 2019, his house was broken into on March 13, at around 3:30 am. No valuables were stolen. Shi said before his visit to the police, no one knew his address. He believed the break-in was the police’s attempt to warn him to stop.

The threat to personal safety was not felt by just him alone.

In an internal Moog email he showed The Epoch Times, one of the engineers involved in the undercover investigation led by Shi into NHJ’s operations, said, “please keep this only in a certain group of people since I will worry about the safety of my family and myself since I live very close to NHJ and they know where I live as well.”

In August 2019, Shi divorced his wife of 30 years, to spare her the psychological and mental stress they were going through.

On April 30, 2020, the court in Suzhou ruled in favor of NHJ. Shi plans to appeal but concedes his chances of success are slim.

“I believe I am fighting a losing battle in front of too much powerful politics alone,” She said.

“But I shall keep fighting until completely being silenced or see the corruption crumble and counterfeiting get addressed.”

Shi believes what he is exposing is very important for the world to know.

Shi said, “Chinese judicial organs as well as party supervisory bodies remained inactive as if the matter was gone if their coverup was long enough.”

“Suzhou must take a lesson learned to treat whistleblower’s complaints seriously as this is a massive public safety issue with tremendous international significance.”

Shi hopes Chinese authorities would not silence him again and would act to keep him and his family safe for speaking out on this vital issue of public safety.

“The Chinese law enforcement must conduct a real criminal investigation on NHJ suspected massive counterfeiting and work with U.S. agencies for enforcement actions,” Shi said.

Counterfeit goods are specifically addressed in Section G (“Manufacture and Export of Pirated and Counterfeit Goods”) of the phase one U.S.-China trade agreement (pdf) signed on Jan 15, 2020: “The Parties shall take sustained and 1-11 effective action to stop the manufacture and to block the distribution of pirated and counterfeit products, including those with a significant impact on public health or personal safety.”
As reported by The Epoch Times, the number of counterfeit goods seized by U.S. Customs and Border Protection increased ten-fold from 2000 to 2018.