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Blog
Aircraft Parts Laundering
First, this
is not an article about Martinizing or French Cleaning of parts.
I found a definition
for Money Laundering as follows: “Popular term used to describe
the process whereby criminals conceal illicitly acquired funds by
converting them into seemingly legitimate income.” And so it is
for those who would try to launder aircraft parts. Persons who engage
this sort of activity are those with stolen parts, parts with missing
trace, or parts whose existing trace is not acceptable to their
customers. I’m not a Lawyer or Law Enforcement Official, so I won’t
comment on the legal terms of what to call such persons. Suffice
it to say that when a deliberate attempt is being made to conceal
a material fact as described below, that’s part laundering.
What are the common methods used to launder parts?
1) Unfortunately,
either wittingly or unwittingly, Repair Stations find themselves
used to launder parts. Lets say you have a part with trace problems,
or a stolen part. You ask that the repair station buy the part from
you, overhaul it, and then sell it back to you. You now claim to
perspective buyers that you have trace to a Part 145 Repair Station,
and you have an 8130-3 to boot. Most end users, when buying parts
from the aftermarket accept trace to Part 145 Repair Stations. There
is a growing trend among some airlines now to require trace beyond
the Repair Station for just this reason.
Here’s
Royboy’s counsel:
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If you’re
a Repair Station Auditor for an airline or third party, ask the
repair station’s salesperson to randomly give you a list of parts
sold. Then ask to go to the records section and ask to see all
the trace files for the randomly chosen sales orders. Better yet,
if they have sold your operation any parts, ask to see a sampling
of the trace for those parts.
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Earlier
I described a growing policy of some airlines to require trace
beyond the repair station. First, carefully consider revising
your policy. For example, if you’re a large airline (with a corresponding
large amount of receiving inspections), you’re going to double
the amount of trace paperwork your inspectors have to review before
accepting such parts, thereby lengthening the time for receipt.
Do you want to do that for every purchase with trace to a repair
station? I suggest that if you’re considering such a policy that
you limit it to first time, unknown repair stations. Exclude 145’s
associated with manufacturers, airlines, or 145’s you’ve had long,
successful relationships with. I may offend some small or new
repair stations by this suggestion, but the ethical ones will
have no problem producing the docs, and hey, it’s my blog so I’ll
say what I want.
There.
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One final
note on repair stations: For your supplier to state that he/she
has trace to a 145, the repair station must exercise their repair
station number. Make sure that this appears on the paperwork.
Pay particular attention to assure that the part they are
selling is reflective of their Certificate, Op-Spec, and capabilities
list. For example, if they are an Avionics repair station, are
they trying to sell a tire? Hmm,. it has happened. Some
repair stations have associated parts distribution operations,
but again, be careful about how they are both representing themselves
as well as the trace of the part. Most of these are legitimate,
but be careful.
2) Beware the
“bottomless” cert. This refers to certs for non-serialized parts.
For example, you have a legitimate manufacturer’s cert for a quantity
of 100 bolts, but you have 10,000 bolts of the same part number
with trace problems. What’s to stop you from using the cert for
the 100 to continue selling parts from the 10,000 in 100 lots? I’ve
heard some people describe this practice as “loaves and fishes”,
a reference to the Biblical story
Here’s
Royboy’s counsel:
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If you’re
an auditor, perform a random sampling of trace documents as is
normal. Write down the part numbers of certs for non serialized
parts for a sampling. Ask the company you’re auditing to show
you in its system how many parts have been sold of this part number.
For quantities that exceed the amount on the cert you’ve sampled,
ask to see the remaining trace paperwork. Of course there should
be a perfect balance between parts sold and the quantities on
all the trace certs, with the exception of parts still in stock,
unsold.
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Also, randomly
check your own trace files with an emphasis on trace docs for
the same unserialized part number from the same supplier.
Are the trace docs different, do the numbers add up, and the
lot numbers differ as applicable?
3) Data Plates:
This is obviously a reference to serialized parts with data plates.
For example, you have a stolen part. You either fabricate a new
data plate with a different serial number, or you have a data plate
stolen from a part in service.
Here’s
Royboy’s counsel:
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For your
high dollar rotables, consider writing or vibro-peening the serial
number of the assembly on the inside of the unit, on the
cover or chassis for example. The repair shop will then routinely
check for the agreement of the data plate with the serial number
on the inside. This sort of thing can get pretty sophisticated
with the use of invisible inks for instance. When you see a disagreement
of the two, it will be your first indicator of possible nefarious
activity.
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In the near
future expect to see a publicly available, free website
for stolen parts. The point being that if you have evidence of
a stolen part with a police report, it can be listed on the website.
In this way, Law Enforcement Agencies can see if there is evidence
of theft-rings operating in certain areas, if certain parts are
being targeted, etc. Of course, if the parts fall into a responsible
party’s hands, they’ll now have a point of contact to return the
parts. I’ve been working on the SUPs Steering Committee to make
this happen, and we expect to have it rolled out in 2004. ILS
has a service for its subscribers to list such parts
4) Forgery:
This is the most hideous form of parts laundering, and for the person
with deep knowledge of paperwork requirements, it would not be too
difficult with the right Art Software on the their desktop computers
to recreate and lift signatures, logos, forms, etc. Has there ever
been a perfect forgery? Not really, but look for the small things.
Here’s
Royboy’s counsel:
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Look closely
at the Logo. Companies are very jealous of their logos, and are
understandably careful of how they are posted, positioned, etc.
In a well publicized SUPs case, a counterfeit Pratt & Whitney
part was nearly identical in most aspects, but the Eagle in the
logo was pointed the wrong way!
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Are the
fonts used in the documents consistent? Does the serial number
or part number field font look different, as if someone has obliterated
those fields and added new info?
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Does the
trace docs look like they’ve been repeatedly copied or faxed?
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Some companies
ask their suppliers for a copy of the signature roster of those
authorized to return parts to service. When doing routine audits,
randomly check for the signatures on the docs you been provided
against the signatures on the roster. Do they match?
Fortunately,
our industry is overwhelmingly composed of honest, ethical firms.
Nonetheless it is the intention of this article to raise the awareness
level of purchasers and receiving inspector so as to intercept this
activity.
Here’s
Royboy’s final counsel:
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FAA AC 20-62,
and the FAA’s SUPs video advises us to “know your supplier.”
Just who is this person/firm you’re buying the part from? Note
especially that this type of review should extend to anyone
in the trace trail for the buy in question, not just the person
you’re directly buying from. THIS COUNSEL IS THE BEST, FRONT LINE
ADVISE TO ANYONE CONCERNED ABOUT PARTS LAUNDERING.
By the way,
just what is Martinizing and French cleaning? I don’t care
really; the lowest priced, closest cleaner is going to get my business.
Keep your creases sharp!
4/5/04
Roy Resto
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VP Technical Operations,
FAA-DAR
Phone: 414 875-2191
Fax: 414 875-0200
royboy@mbtrepair.com
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