What? You replace real working parts with fake/non-working stuff, and you pocket the diff in cost. You cut all QA b/c you know it's fake, no need to test.

The government pays, but, you have a much higher profit margin if you just fake everything.

Is it worth the risk though? I suspect deliberate fraud like this will be caught by the military, it will lead to scandal, and not only will it cost money but will likely lead to prison times for the people involved.

Boeing's lies and conspiracies around the 737 MAX directly led to the deaths of hundreds. Their ultimate penalty was a settlement involving a fine equal to about 2 days of revenue, and compensation to the families of those they killed equaling to about 12 more days of revenue. [1] The release did not specify, but settlements of this sort generally require the victims to waive their right to further civil or other legal measures, so that's the end.

The people ultimately responsible for these things not only don't go to jail, they tend to make substantial profit from it after all is said and done. In a a matter of weeks everybody had forgotten (except I'm sure those related to the victims), a slap on the wrist was given, and we're straight back to giving Boeing billions of dollars in taxpayer funds to do the only thing they're good at: killing people.

On the off chance somebody doesn't understand the reference - Boeing is the 2nd largest defense contractor in the US, scoring upwards of $22 billion in contracts las year, after that settlement.

[1] - https://www.justice.gov/opa/pr/boeing-charged-737-max-fraud-...

Things would have been a bit harder for Boeing if they'd killed more US citizens instead of mostly Ethiopians and Indonesians.

> it worth the risk though?

Can speak from the perspective of a finance professional constantly rolling his eyes at insider traders. Many people assume enforcement is far weaker than it is. That leads them to make stupid choices. For a period of time, during the Iraq War, enforcement was weak around military procurement. But the wheels of justice grind slowly, and I guess every generation needs its examples.

> But the wheels of justice grind slowly, and I guess every generation needs its examples

All the covid relief and stimulus fraud that's slowly being investigated is another example of this. All you have to do to disabuse yourself of the idea that law enforcement is weak is go to justice.gov and click news.

https://www.justice.gov/usao/find-your-united-states-attorne...

Click on any of the states, click news. Tons of covid fraud being prosecuted already in all of these places where small fry's thought they could get away with this. Medical fraud is another example.

https://www.justice.gov/usao-sdms/pr?keys=covid&items_per_pa...

Okay, and that's great and all, but the DOJ basically doesn't go after big fish anymore. As the commenter above you points out, lot's of these kinds of things still end up being revenue positive

I don't know of any big fish where's there's sufficient evidence that they have committed crimes and where the DOJ has decided to not charge. What are some examples?

I've been with a few separate orgs that had this exact thing happening. When you flag it, they come down from on high saying "oh, it's been waived", trusting that no one will actually ask to see the waiver. Two of those orgs ended up paying fines, nothing compared to the profit, but eh, better than nothing.

I'd say it's far more likely that Teledyne let an unauthorized, or improperly cleared, technician touch the production line, who then stole the parts for intelligence purposes and replaced them with stuff he acquired by other means (desoldered them from home stereos, purchased on eBay, whatever). That would motivate a cover-up. No American, particularly someone working in the defense industry, wants fighter pilots to die. Unless of course they have other allegiances.

This is so hilariously naive I almost don't know what to say. If anything it's the other way around nobody cares about the soldiers as long as the bottom line is met. I mean just look how the US treats their veterans, to proof the point.

This is such a naive view.

Optimism bias is also a thing, they don't necessarily need to "want fighter pilots to die", but it won't stop some people trying to pocket some money ("it may never be used anyway").

Greed is much more common than sabotage. Everyone at every level of production uses 3rd party materials and counterfeit has the potential to be cheaper than non-countfit.

That seems maybe plausible if the components are worth a lot or you steal a lot of them. Is either of those things true here?

Defense contractors generally pay about 10% less than market for any given service, so I don't discount the possibility that my hypothetical technician may have stolen the goods in order to get some extra money. A poor financial situation is easily the most common motive for the direct perpetrators of espionage.

There's definitely reasons: profit = revenue - costs.

If revenue is fixed, the only way to make more money is to reduce costs. Using cheaper parts with less/nonexistent quality control is one way to do that. Or even just straight up laziness. The "trust but verify" approach is more work than just trusting your suppliers to never make mistakes.