Parts Fraud Repeat Offender Goes Up The River

by Aero-News Senior Correspondent Kevin R.C. "Hognose" O'Brien

When Amanullah Khan, 56, of Brea, CA stood to face the judge for sentencing Monday, a case that began almost exactly four years ago with a small aluminum forging that should have been made of steel finally saw justice done. Federal lawmen uncovered millions of dollars worth of fraud, and unimaginably callous risks taken with human lives, in the course of a case that wove through Federal courts on both coasts of the nation -- and sent two men to prison.

When Special Agents from the Department of Transportation and the FBI called on United Aircraft & Electronics in Anaheim, California, on November 29, 2001, they were met by one of the partners, Wali Merchant. They asked him many questions, including some specific ones about FAA Forms 8130-3 ("Authorized Release Certificate," formerly called "Airworthiness Approval Tag") on Bell 205 ("Huey") helicopter parts; and tail rotor grips that had been altered. Merchant said that he never shipped 8130-3s with parts, certainly didn't make his own 8130-3s, and never altered any tail rotor grips... or his name wasn't Wali Merchant.

Except, of course, his name wasn't "Wali Merchant." "Merchant" was actually Amanullah Khan, a naturalized citizen from Pakistan, who'd already been convicted in another aircraft parts fraud case, and been banned from doing business with the United States military. His other statements were lies also: he'd shipped millions of dollars worth of aircraft parts with 8130-3s. (But the forms were bogus; shown to the manufacturers or the DARs who supposedly generated the forms, they were fingered as forgeries). And well, he had altered tail rotor grips.

At about this point, helicopter pilots reading this story have developed a clenched-gut pucker, because they know what tail rotor grips are. As the above picture illustrates, they're the little beggars that hold your tail rotor blades on. When they let go, bad things happen, which usually involve the helicopter rotating counter to the main rotor blades' rotation, shaking itself to pieces, and/or plummeting to the ground. What Khan did was take an obsolete part, Bell 204-011-728-019, which was an aluminum alloy tail rotor grip (204), and put a new data plate and tag on it representing it as a 205-011-711-101 steel grip (205).

The parts were physically interchangeable, but they were not equivalent. The 204 part was developed for the short-bodied Bell 204/UH-1A/B/C Huey helicopter. The 205 part was introduced with the Bell 205/UH-1D/H/etc long-fuselage helicopters. 

The alloy (204) grips -- before Bell took them entirely out of service -- had a service life of 300 hours. The steel (205) parts have a service life of 2,500 hours. Khan's parts, actually worth only their scrap value, became instantly valuable airworthy parts -- on paper. Counterfeit paper.

An employee of United, Dat Vu, did the actual work of changing data plates at the direction of Khan and his partner, Ziad Jamil Gammoh, 56, of Tustin, CA. Gammoh is a naturalized citizen originally from Jordan.

Court documents said that the parts were shipped with "two false documents:  (1) a UA&E certificate of conformance signed by 'Oscar Munoz' which stated that the parts were 205s; and (2) a fraudulent FAA 8130-3 purporting to be from Bell Helicopter, certifying the airworthiness of the bogus 205s." Imagine having that part on your helicopter with 2,100-odd hours on it and flying with confidence, knowing you had over 300 hours to replacement -- when you actually were seven times over the design life of the part. Yikes!

Things didn't end with tail rotor grips. Khan and Gammoh also did cosmetic refinishing on worn-out turbine blades and then repackaged them as new Pratt & Whitney parts, using counterfeit P&W packaging. The case ended in a surprise guilty plea before the US Attorney could present all the evidence of turbine blade counterfeiting and false certification. In a way this was worse than the rotor grip misconduct, because rotor grips are a serialized part and those sold by United Aircraft & Electronics can be tracked down. Turbine blades and vanes that live in the hot sections of engines are not so serialized, and the government cannot be confident that is has tracked down all of Khan and Gammoh's bogus blades and vanes.

The operation Khan set up was stark in its simplicity and breathtaking in its criminality. For at least a year -- possibly longer -- it ran a blade "reconditioning" assembly line. When the agents executed a search warrant at United Aircraft & Electronics on December 13, 2001, they seized a number of complete and in-process blades and vanes; more of the parts came from United customers.

The prosecutors charged that United Aircraft & Electronics was running "a mill that took scrap quality vanes and blades, made cosmetic refurbishments, then sold those vanes and blades to unwitting customers as new. [Khan] certified the vanes and blades were new, then accompanied the parts with FAA Form 8130-3s that not only misrepresented that the parts were new, but falsely certified that they were airworthy. Unsuspecting end-users of these parts who relied on defendants' certifications and bogus FAA Form 8130-3s could easily have placed these scrap-quality parts into a jet engine."

Richard Bogdan, a Pratt and Whitney engineer, examined the US&E modified parts, and the court papers record his judgment:
 
"They all exhibited signs of engine use, some under extreme conditions; many showed signs of a crude weld repair which not only exceeded approved repair limits but penetrated the cooling mechanism, rendering it ineffective; many showed signs that repair station markings had been obliterated; and many no longer met the physical specifications for the part because of material changes associated with engine use." Further, "...[g]iven the condition of the parts -- compromised heat coating, ineffective cooling passages, improper weld repairs, presence of metal fatigue -- the parts could fail at extreme temperatures." As the vanes and blades in question live in the hot section of the engine, extreme temperatures would be unavoidable.

And it didn't just stop with counterfeit parts. A couple of days after interviewing Khan, Special Agent Paul Blake discovered that another investigation of United was underway -- that one out of the Washington, DC, district, and dealing with trafficking in arms. (Indeed, this is when Blake learned "Wali Merchant's" real name and criminal history. Khan had been trying to sell warplane parts, including parts for F-4, F-5, and F-14 fighters to a Chinese company. (The Chinese do not operate these aircraft; the parts were probably for resale to Iran, which does, but is under US embargo).

Ironically, Khan had sold bad parts to US and friendly interests and tried to sell good parts to potential US enemies.

Khan and Gammoh were arrested in April, 2002 on the counterfeit-parts charges, but the investigations didn't stop. Their company premises yielded a treasure trove of fool's gold -- counterfeit and mislabeled aircraft parts, millions and millions of dollars worth, and records showing that over $5 million in fake parts had been sold and shipped to unsuspecting customers.

The most serious violation was the misrepresentation of the above-mentioned tail rotor grips; working in cooperation with Bell, the FAA issued an Emergency AD and an Operations Safety Notice about United's killer grips -- with the result that none appears to have flown long enough to fail. (Indeed, Khan's attorneys cited the lack of any deaths -- yet -- in a cheeky, but futile, shot at a reduced sentence).

Gammoh was released on bail but since Khan was already on supervised release -- Federal parole -- at the time of his crimes, he was held by the court. In 2003, the men were rearrested for the arms-trafficking charges.

During the trial, Khan's lawyer used an FAA Form 8130-3 to try to impeach a prosecution witness on cross-examination. The maneuver backfired as the form turned out to be a forgery -- presumably by Khan.

After that, Khan changed his plea to guilty on 12 counts, bringing the trial to a sudden halt.

Gammoh, tried separately, was sentenced to 6 1/2 years in Federal prison. Khan, his sentencing aggravated by his being out on supervised release from a previous conviction on similar charges, drew a 15-year sentence when the hammer finally fell on him in Federal District Court in Santa Ana, CA this week.

Neither Khan nor Gammoh has reported to prison yet. When they do, you'll be able to find them at the FMI link: the Federal Bureau of Prisons. But, even as we think this sordid case is over for good, an alarming note is sounded by the prosecutors: "Even today, there is the risk that a passenger jet in Southeast Asia or Eastern Europe is flying on an engine that contains a vane or blade that defendant sold." Because the authorities got control of all the fake tail-rotor grips, but they never were able to track down all the bogus Pratt & Whitney vanes and blades. WIth the ultimate consequences of his counterfeiting career still unknown, Khan may turn out to have been lucky to get only fifteen years.

FMI: www.bop.gov