Bogus Parts Broker Sentenced to 15 Month

Feb. 26th, 2004
Bogus Parts Broker Sentenced to 15 Month 
by Tim van Beveren, Miami

Tempio Pausania, Italy: Enzo Fregonese, 75 year old owner of Panaviation srl, an aircraft spare parts broker company located in Rome, Italy today was sentenced to serve 15 month jail time for distributing unapproved aircraft parts throughout the aviation industry. The final ruling followed a three year criminal investigation, codename “Operation Latin Phoenix”, which was conducted by the Italian state prosecutor and a special unit of Italian Financial Police (Guardia di Finanzia). The investigation did reveal that via Panaviation srl and several other aircraft parts brokers highly questionable spare parts have been distributed around the world. This is the first sentence ever in an unapproved parts case in Europe so far.

Two years ago an unapproved parts notification (UPN), issued by the Italian civil aviation authorities ENAC alarmed the industry. During preceding raids in hangars and store facilities the authorities have seized numerous aircraft parts in questionable condition, though they were ready to be shipped to customers around the world. The investigators further found evidence of falsification of required accompanying paperwork, namely for life limited parts as well as obviously forged JAA Form Ones and FAA 8130’s.

Already back in November 2003 Enzo Fregonese pleaded guilty, but the judge rejected this plea. With this legal step though Fregonese was able to save his inventory, – approximately eighty thousand parts and other private assets, which could have otherwise remained confiscated by the Italian government. Soon these parts now may reappear on the market, but according to ENAC “under strict new rules and guidelines”. In the wake of the investigation, Italy has considerably enforced its regulations in regards to unapproved parts and parts cannibalized from old aircraft.

During the judicial session on February 26th, 2004 Fregonese voluntarily agreed on four counts of indictment. Consequently he was sentenced for the attempt to jeopardize the safety of air transport, which is related to the Italian Penal Court Article 432. Fregonese for example acknowledged and pleaded guilty of having sold a fuel quantity indicator for an MD80 aircraft which has never been overhauled by an authorized repair facility, as indicated by accompanying paperwork. Thereby the instrument ended up in a plane operated by Italian regional carrier Meridiana. He further pleaded guilty for forging official airworthiness certificates (Form One) for material to be installed into Fokker airplanes. The Form One originally indicated that the part belonged to Italian flag carrier Alitalia, but the company did not recognize the form, once it was made available to them by the later US buyer.

In January 2002 the Italian Civil Aviation Authority ENAC alarmed the worldwide aviation industry about initial findings into the investigation. Though ENAC expressively declared all parts distributed by Panaviation as “suspected unapproved parts” which makes them illegal to be installed on aircraft or be kept in stock, only few parts were traceable and resurfaced. Investigators believe that probably effected parts have been distributed via consignment sales operation in the US to operators on all continents and urged maintenance and repair facilities to cross check their inventories. Although ENAC has requested feedback upon finding any Panaviation parts, only few nations complied with this request. The equivalent “suspected unapproved parts notification” released by the US Federal Aviation Administration (FAA) only five days after the Italian warning did not include the request for feedback to the Italian Aviation Authority.

Many operators were affected by the scheme. While producing a 52 minutes TV documentary (Title: “Operation Latin Phoenix” aired first in February 2003 by German PBS station WDR and later an updated version on January5th, 2004 by SAT1) on the Italian investigation and its consequences the producers learned that airlines such as Lufthansa, former Swissair, Crossair, AUA, SAS, Singapore, Air France, Alitalia, Air One and Northwest Airlines (to name just a few) were among the customers of Panaviation srl and had to check their inventories and fleets.

Nevertheless the consequences for the industry are alarming. German flag carrier Lufthansa for example was forced to change a hydraulic connector, belonging to the trust reverse opening for the CF-6 engines. Unfortunately for Lufthansa it could not recall were they may have installed the total of five connectors they have received and which had become suspected unapproved parts. The German Civil Aviation Authority the LBA’s (Luftfahrtbundesamt) reaction was sharp:
The suspicious part was ordered to be removed from “all engines in operation in Germany”. So Lufthansa was forced to exchange it on the 150 engines (!) belonging to their fleet of B747 and Airbus A300/310 aircraft. Deadline was November 2003.

Italian flag carrier Alitalia was forced to remove over 640 bearings within the landing gear assemblies of its MD 80 fleet because of similar tracing problems and the local carrier Air One had numerous aircraft grounded by ENAC in order to remove parts, purchased from Panaviation. Among the customers listed on Panaviation’s customer list are as well very renowned manufacturers, such as Airbus Industrie and repair facilities around the world. Aviation experts estimate the damage inflicted to Airlines and maintenance facilities just by accomplishing inspections and specific removals may already exceeds several Million Euros.

But still thousands of these “ suspicious parts” have not been traced yet despite great efforts by law enforcement and civil aviation authorities. The former investigators of the Italian case believe they may be still installed in numerous aircraft, flying somewhere this very moment. Because of the high risk of sudden failure of such components the investigators refer to them as “ticking time bombs on board of planes”. Panaviation has conducted its questionable business since the early nineties, but operators and repair facilities are only required to keep their records for a period of seven years, thereby making it impossible to trace transactions prior to 1996, though the parts may be still in circulation (installed) or on their shelves.

In the wake of the investigation it became obvious that the major obstacle for operators, maintenance facilities and the authorities is the fact that brokers of aircraft parts do not have to be regulated or otherwise certificated or authorized. Further the required documentation, associated with a spare part is far from being safe against manipulation and forgeries. In fact each and every five Euro bank note has more safety features incorporated than a JAA Form One or its equivalent the FAA Form 8130, which makes it easy to falsify such documents with the help of scanners or simple Xerox machines. And finally Europe has no specific laws governing the distribution of unapproved parts, while the US has introduced a specific new law in the wake of numerous unapproved parts cases throughout the late nineties. The code 18 USC provides clear definitions of crimes and penalties up to lifetime in jail for such offences.

Some of the effected maintenance facilities such as Swiss SR-Technics and Austrian AUA would strongly support the idea of regulating brokers and part dealers according to the JAR 145 certification. But such steps would require an agreement by all European member states and would only make sense, if namely the FAA would impose similar restrictions upon the trade and distribution of aircraft components.

Last but not least it has been always the argument of opponents to such stricter regulation that – so far – no fatal accidents associated with the use of unapproved or bogus parts were reported. This is not true. Besides the one of a Norwegian Charter Plane belonging to former Partnair which crashed on September 18th, 1989 while enroute from Oslo to Hamburg there are many more and almost on all continents. Some luckily only caused heavy and minor injuries, but nevertheless they occurred because unapproved parts were installed on an aircraft and failed. The most recent one, I’m aware of, is the one “on record” in Germany. The accident occurred on February 8th, 2001 at Nuernberg Airport, involving a Lear Jet 35A and ending fatal for its crew of three.

The German Accident Investigation Board (BFU) learned through forensic studies performed at the HD turbine disk of the left TFE31 jet engine that the part had failed being 4117 cycles above its maximum designed lifetime of 5000 cycles. Only given the fact that the flight ended with fatalities this became an incident under investigation of the BFU. Would the plane have made it back to the airport, only a flight report would have been filed and the real cause of the sudden engine failure after take-off would have never been officially investigated. The effected engine would have been replaced and it would have been up to the operator, his insurance and the repair facility to find out about real nature the catastrophic failure of the HD disk. The event itself would have never made it into any of the databases.

Which leads to another obstacle in adequately understanding the dimension of this modern virus that has effected the airline industries logistic system to an alarming extend. Already back in 1993 the National Transportation Safety Boards (NTSB) database contained hundreds of accidents, many of them with commercial aircraft, which would pop up if the database was searched by the category “bogus part”. In 1995 the FAA asked the NTSB to delete that category. Since those accidents can be found buried within the category “maintenance related”. Sounds like somebody got some ideas from George Orwell’s novel “1984” where the protagonist, in his job, has to delete “news” and constantly rewrite historical events. – Nevertheless, such “cleaning” of databases has never been an appropriate way to deal with safety issues. “Specially not, if meanwhile criminal activities have become involved in this business and were unscrupulous minds dare to risk the life of hundreds of innocent people boarding a plane.” says Cpt. Bernd Kopf, himself a Boeing 747 pilot of German Cockpit Association VC. “The traffic in unapproved parts has reached a criminal stage, because of the high profits one can make in dealing such items. As a matter of fact it is well known by Court records that meanwhile even former drug dealers deal in aeronautical parts because they do not have to deal with junkies, but with well suited business man and make the same profits with a lower risk, in case they’re caught “. Maybe it have been such statements which lead finally US Congress to release a new law, Title 18 USC, Part II, Sec. 38 which probably should be enforced on the highest level, in order to reduce the risk of further fatalities caused by unapproved parts. There are rumors in Washington that this law only became released in record time because even the fire extinguishing system of famous Air Force One was found to be equipped with bogus parts in 1998. The two dealers who provided these parts as well to other operators, such as Lufthansa, – despite pleading guilty on all counts, got sentenced to 30 years in jail. But is there any difference between the life of a US-President, a pilot or crew member and a paying passenger?


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