Workers Say Managers Knew About Bad Parts : Probe: They tell FBI that top Air Industries officials were aware that tests were falsified and key components defective.

GARDEN GROVE —  Five former and current employees of Air Industries Corp. told the FBI that top managers at the company knew that the company was falsifying test results and shipping defective aerospace fasteners to the Pentagon and aircraft manufacturers, court records show.

FBI Agent Gary L. Pilawski said informants told him that company executives were aware of the shipments of defective fasteners, or highly specialized nuts and bolts that hold an aircraft together, according to an affidavit filed last week with the U.S. District Court in Santa Ana.

“I believe that certain employees of AIC are and have been involved in the falsification of manufacturers’ test data utilized to generate false manufacturers’ test reports,” Pilawski said in the affidavit, which was used to obtain a search warrant.

The tips from employees led to a raid by 30 to 40 federal agents on Air Industries’ headquarters in Garden Grove last Friday. During the 12-hour raid, federal agents seized a variety of records relating to parts testing.

“We are confident that, after a thorough investigation, the U.S. attorney’s office will issue a statement exonerating the company,” Sam Higgins, Air Industries president, said in a statement. “Air Industries has always maintained standards of excellence within the industry and will continue to do so in the future. We deny any wrongdoing and look forward to a prompt termination of this matter.”

Higgins said Air Industries has not been informed of specific allegations against it. The company will continue to cooperate with the investigation, he said.

Sherry Nebal, a spokeswoman for Boeing Co. in Seattle, said that Boeing officials cooperated with the federal investigation and that the company has had problems with the quality of Air Industries fasteners shipped to Boeing during the past year.

Air Industries employees told the FBI that the practice of shipping defective parts and falsifying test records went back to January, 1988, the affidavit said.

The affidavit said Boeing quality inspectors audited Air Industries on Feb. 28, 1990 and subsequently removed it from a list of acceptable suppliers, relegating the company instead to a “conditional” status.

A year ago, Boeing rejected titanium parts from Air Industries that contained oxygen contamination defects, which could cause the parts to become brittle and fail, the affidavit said.

An Air Industries employee interviewed by Pilawski said top company executives knew about the bad parts and confiscated a notebook kept by an employee which reportedly contained a log of defective parts shipments.

The employees alleged that the company destroyed records for parts that failed tests, stamped false inspection approvals on records and knowingly shipped the parts to manufacturers.

Nebal said Boeing has cooperated with the federal investigation and believes that it has identified all the defective parts and that none is on any of the company’s fleet of airplanes. The company continues its review process, she said, and has resumed purchasing fasteners from Air Industries.

“We purchase more than 100 types of fasteners from Air Industries on an ongoing basis,” Nebal said.

The affidavit was unsealed Tuesday after federal agents concluded that the identities of the cooperating employees were revealed to the company during the raid.

John Thom, spokesman for Douglas Aircraft Co. in Long Beach, said Air Industries is a supplier to Douglas, but he declined comment on the investigation. He said Douglas checks its parts for quality and believes that its fleet of aircraft is safe.

“We believe it was necessary to bring the information to the attention of the company’s customers,” said Bruce Carter, assistant U.S. attorney in charge of the federal task force conducting the fraud investigation in Seattle.