On December 19, 1993, about 0015 eastern standard time, a Israel Aircraft Industries 1124, N74JM, registered to Turnberry Charters, Inc., experienced an uncontained failure of the no. 2 engine while in cruise flight near Melbourne, Florida, while on a 14 CFR Part 91 corporate flight. Visual meteorological conditions prevailed at the time and an instrument flight rules flight plan was filed. The aircraft received minor damage and the two pilots and seven passengers were not injured. The flight originated at Daytona Beach, Florida, on December 19, 1993, about 0000. The first officer stated that shortly after they leveled at 29,000 feet and set cruise engine power they felt severe vibration and heard unusual noises. They observed the no. 2 engine had lost power. They shut down the no. 2 engine and diverted to Orlando, Florida. Postlanding examination of the aircraft by an FAA inspector indicated the no. 2 engine had sustained damage in the turbine section and that a component had exited the engine through the turbine case, engine cowling, and tail pipe. The third stage low pressure turbine wheel (LPT-3)was recovered from inside the roof of a house in Melbourne, Florida. Examination of the no. 2 was conducted at Allied Signal Engines, Phoenix, Arizona. Examination revealed "the second stage low pressure turbine wheel (LPT-2) experienced a separation of a small segment of the disk near the rim. The separation resulted in rotational unbalance of the low pressure turbine rotating group and expulsion of the LPT-3 wheel overboard. Metallurgical analysis of the LPT revealed the rim separation of the 2nd LPT to be primary with all other damage secondary. The 2nd LPT separated due to a machining anomaly in a blade slot in combination with sub standard heat treat process resulting in reduced fatigue life." See attached Allied Signal Engines report.