Penn Yan man admits falsifying inspections for Space X parts

Rochester, N.Y. — A Yates County man could spend over a decade in prison for falsifying inspection reports for parts used by Space X and other Department of Defense contractors.

James Smalley, 42, of Penn Yan pleaded guilty in U.S. District Court on Wednesday to allegations that he falsified inspection reports and testing certifications while working as an engineer at PMI Industries, LLC in Rochester.

Prosecutors say Smalley worked in quality assurance and doctored at least 38 source inspection reports for space vehicle parts procured by SpaceX, affecting seven NASA space flight missions, two United States Air Force space flight missions, and one National Oceanic and Atmospheric Administration space flight mission.

Between March 2017 when Smalley started and February 2018 when NASA was notified about the falsified documents, prosecutors said an internal audit found Smalley had photocopied an inspector’s signature and cut and pasted it onto reports over a computer. The parts were for Falcon 9 and Falcon Heavy flight critical parts.

Some of those parts were going to be used for an upcoming mission called Transiting Exoplanet Survey Satellite (TESS), which launched from a SpaceX Falcon 9 rocket on April 18, 2018.

There were 76 individual piece parts that were rejected during source inspection or were never inspected, then subsequently shipped to SpaceX.

Due to the fraud, SpaceX ended its relationship with PMI, which subsequently closed.

Smalley is expected to be sentenced on May 13. He is facing up to 15 years in prison and a $500,000 fine.