August 1, 2004
By John S. Yodice
John S. Yodice is a founding member of the National Transportation Safety Board Bar Association.
You may remember the fabled stories that helped make the term used-car salesman a disparaging one. You know, the stories in which the salesman routinely sets back the odometer of a car he is selling to misrepresent the actual mileage. Sometimes the sales pitch was spiced up with the representation that the car was only used by a little old lady to go to church on Sundays. (This is with apologies to the many legitimate used-car salesmen from a "John" whose name and profession also are burdened with some disparaging undeserved inferences.)
Well, here is the aviation version of that story, playing out in an enforcement case being prosecuted by the FAA. The story is interesting in and of itself. But it also gives us an insight into some of the laws that the federal government has in place to protect us against "unapproved" and "counterfeit" parts, parts that could find their way into our aircraft. The potential safety threat posed by unapproved parts is a hot issue that the FAA has addressed for at least the past 10 years or so. However, the laws cited in this case have not gotten the same publicity as other parts of the FAA's program for detecting and reporting suspected unapproved parts. Here is a good opportunity to look at two of them, one administrative and the other criminal.
As the story goes, at least according to the FAA allegations in this case, the seller of a used Robinson Model 22 helicopter fraudulently misrepresented the time and airworthy condition of the helicopter he was selling to an unsuspecting buyer. The seller was an individual doing business as an aircraft sales company. As part of his scheme, the seller had a Hobbs meter installed in the helicopter. The Hobbs meter showed a cumulative time much lower than the actual time that the helicopter had been flown. (Is this beginning to sound like the fabled used-car salesman?) To further perfect this fraudulent scheme, the aircraft salesman allegedly doctored the logbooks to show annual inspections with corresponding total aircraft times that concealed the actual times in service of the helicopter and its parts. The effect of these fraudulent entries was to conceal that the helicopter had seriously exceeded the time on many of its critical life-limited parts and some applicable airworthiness directives. For example, the main rotor blades, the tail rotor gearbox gear set, the coning hinge bolt, and the pitch horn screws all were out of time. Even the airframe had exceeded the 12-year inspection and limited overhaul requirement specified in the manufacturer's maintenance manual.
All of this came to light when the new owner just happened to take the helicopter back to the same maintenance facility that had previously serviced it. The maintenance facility recognized the helicopter. It knew its history and reported it to the new owner.
When the FAA was advised of the situation it conducted an investigation. The result of the FAA investigation was an enforcement action against the aircraft salesman. After giving the aircraft salesman an opportunity to tell his side of the case, and being unconvinced by his explanation, the FAA ordered the emergency revocation of his private pilot certificate (in other words, an immediate grounding). The aircraft salesman has since appealed the FAA order to the National Transportation Safety Board. The matter is still pending.
This gives us an opportunity to take a look at the law under which the FAA is proceeding in this case. It is Section 44726 of Title 49 of the United States Code, a provision of the federal aviation laws that deals specifically with "counterfeit parts" violations. This provision mandates that the FAA revoke the pilot certificate, and in fact any FAA-issued certificate, of any person, including companies, who "knowingly and with intent to defraud, carried out or facilitated an activity punishable under...a law of the United States relating to the installation, production, repair, or sale of a counterfeit or fraudulently represented aviation part or material."
The "law of the United States" cited by the FAA as having been violated in this case is 18 United States Code, Section 38, which is descriptively named "Fraud involving aircraft or space vehicle parts in interstate or foreign commerce." It is a criminal statute that we will take a closer look at later. For now, though, we will stay with the administrative action under Section 44726. This section, which as noted mandates certificate revocation, at the same time affords some important procedural rights to the certificate holder. In this case the aircraft salesman with a private pilot certificate is the certificate holder. This section requires that the FAA first advise the certificate holder of the reason for the action being taken, before taking any action against his certificate. It also requires that the FAA provide the certificate holder with an opportunity to be heard as to why his certificate should not be revoked. If, after these procedural rights are given, the certificate is nevertheless revoked, the holder may appeal the certificate action to the NTSB. As I said earlier, the aircraft salesman did have an opportunity to explain his side to the FAA, unsuccessfully as it turns out, a revocation order was issued, and he has since appealed the FAA revocation order to the NTSB.
Some might say that losing one's private pilot certificate is a small price to pay for this kind of fraudulent violation. Well, the FAA revocation action may not be the end of it. So far, this is only an administrative proceeding, not a criminal one. But, as we mentioned earlier, the FAA order cites a federal criminal statute as one of its key allegations in order to support the administrative proceeding. It is a statute worth noting because it also specifically relates to aircraft parts (and also space vehicle parts). The statute, as it relates to this case, makes it a crime to fraudulently falsify, conceal, or misrepresent a material fact concerning any aircraft part. It also defines as criminal the making or using of materially false records (logbooks, forms, etc.) concerning any aircraft part. In its administrative order, the FAA charged that the falsification of the records of the Robinson helicopter, and particularly the fraudulent representation to a prospective purchaser of the actual time on the helicopter, is a violation of this statute. These alleged violations, if eventually prosecuted as crimes, are punishable by imprisonment for up to 15 years and a fine of up to $500,000, or both. So the other shoe may not yet have dropped. This aircraft salesman could well be facing criminal prosecution under this criminal statute, in addition to the loss of his private pilot certificate.
The message from this pending enforcement case, and one worth noting, is that fraudulently misrepresenting the time and airworthy condition of an aircraft is not only a basis for the revocation of any FAA certificate held by the defrauder, but also it is a crime punishable by a fine and imprisonment. The judicious enforcement of both of these laws should be some help in keeping unauthorized parts out of our aircraft.
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