Yates Co. man who forged inspections for NASA mission parts gets probation

Gary Craig and Will Cleveland
James Smalley leaves federal court after an earlier hearing.

A Yates County man who admitted that he forged inspection reports for aerospace parts used by NASA has been sentenced to probation.

James Smalley, 43, of Penn Yan, in February pleaded guilty to the 2017 falsification of inspection reports. U.S. District Judge Elizabeth Wolford last week sentenced him to three years of probation.

While working as a quality assurance engineer at the former PMI Industries in Gates, Smalley forged the signature of an inspector on reports for products that were sold to California-based SpaceX. Some of the false inspection reports and certifications were related to manned-mission space launch vehicle components used by the National Aeronautics and Space Administration, or NASA.

SpaceX discovered 38 instances of falsified reports. The fraud was discovered in quality control checks, and the parts, which were not used, cost about $126,000, court records show.

Federal sentencing guidelines recommended a sentence of 12 to 18 months. Smalley’s lawyer, Assistant Federal Public Defender Sonya Zoghlin, sought a sentence of probation.

Court records say that Smalley feared he would lose his job if he did not continue inspections at what he indicated was a growing and unsustainable pace. He forged inspections by cutting and pasting the signatures of inspectors.

Smalley did not know some parts would be used in manned missions and thought they “would only be used in unmanned, prototype vehicles,” Zoghlin wrote in court papers. He thought the parts were non-critical, she wrote.

He also thought the parts had been thoroughly inspected before requiring his signature, according to records.

After the discovery of the forgery, SpaceX ended business with PMI, court documents say. SpaceX had been paying about $200,000 a month to PMI, which closed down after losing the SpaceX business. About 35 people lost jobs, records say.