James Smalley, Space Parts Forgery, NY 2024

James Smalley, 41, of Penn Yan, NY, was arrested and charged with falsifying inspection reports for critical space vehicle components destined for SpaceX and U.S. government missions. The criminal complaint alleges Smalley, a Quality Assurance Engineer at PMI Industries, LLC, forged at least 38 source inspection reports and falsified non-destructive testing certifications for flight-critical parts used in the Falcon 9 and Falcon Heavy rockets. The charge carries a maximum penalty of 10 years in prison and a $250,000 fine.

Smalley began working at PMI Industries in Rochester on March 6, 2017, a precision machining firm specializing in high-tolerance aerospace components. The company held contracts with SpaceX, developer of the Falcon launch vehicles and Dragon spacecraft, both of which deliver payloads into orbit for NASA, the Air Force, and private industry. SQA Services, Inc., a subcontractor to SpaceX, conducts independent quality assurance audits across the aerospace supply chain. In January 2018, an internal audit by SQA uncovered blatant forgeries in PMI’s documentation—including a photocopied and digitally manipulated inspector’s signature on official reports.

The investigation revealed Smalley shipped at least 76 individual piece parts that were either rejected during inspection or never inspected by SQA. These components were routed directly to SpaceX for integration into active launch programs. On February 16, 2018, the NASA Launch Services Program notified the NASA Office of Inspector General and Kennedy Space Center officials about the falsified documentation. Some of the compromised parts were tied to the Transiting Exoplanet Survey Satellite (TESS) mission, which launched aboard a Falcon 9 rocket on April 18, 2018.

SpaceX launched a records review and identified seven NASA missions, two U.S. Air Force launches, and one National Oceanic and Atmospheric Administration (NOAA) mission affected by PMI-supplied components. The scope of the fraud triggered immediate disqualification of PMI as a supplier. The company, which had averaged $200,000 per month in business with SpaceX, lost all contracts and ultimately ceased operations.

Assistant U.S. Attorney Richard A. Resnick, leading the prosecution, emphasized the gravity of undermining aerospace safety standards. “Source inspections and NDT certifications are life-or-death safeguards in spaceflight,” Resnick stated. “Falsifying these records doesn’t just break the law—it jeopardizes missions, personnel, and national security.”

“The success of America’s reinvigorated space program depends not just on American ingenuity but on American integrity as well,” said U.S. Attorney James P. Kennedy, Jr. “These charges make clear that those who commit fraud against NASA, the Air Force, the National Oceanic and Atmospheric Administration, and private partners like SpaceX, will be held accountable when they seek to cut corners. Such fraudulent conduct will not be tolerated.”

CONTACT: Barbara Burns | PHONE: (716) 843-5817 | FAX #: (716) 551-3051

RELATED: “Gordo” Cirino Gets 11+ Years for Cocaine Pipeline

RELATED: Pittsburgh Duo Charged in Bank Robbery Spree