Boeing pleads guilty to 737 MAX fraud, pays $243.6 million By Investing.com

Boeing pleads guilty to 737 MAX fraud, pays $243.6 million By Investing.com
Boeing pleads guilty to 737 MAX fraud, pays $243.6 million By Investing.com

Boeing (NYSE:) Co. has agreed to plead guilty to one count of criminal fraud conspiracy, resolving a U.S. Justice Department investigation into the 737 MAX crashes in Indonesia and Ethiopia that resulted in the loss of 346 lives. The crashes took place over a five-month span in 2018 and 2019.

The aerospace giant will pay a $243.6 million criminal fine, according to a Justice Department document filed in a Texas federal court. The plea deal is pending approval by a federal judge and would label Boeing a convicted felon.

The charges stem from allegations that Boeing made false statements to the Federal Aviation Administration (FAA) regarding the enhancement of a key software feature, known as the Maneuvering Characteristics Augmentation System (MCAS), which was implicated in both crashes.

The system, designed to automatically push the plane’s nose down under certain conditions, was linked to the two fatal incidents that led to a 20-month FAA grounding of the plane, lifted in November 2020.

As part of the settlement, Boeing has also agreed to invest a minimum of $455 million over the next three years to improve its safety and compliance programs. In addition, the settlement requires the appointment of an outside monitor to oversee Boeing’s compliance with its compliance measures. This monitor will submit annual public reports to the court on Boeing’s progress.

The company’s board will meet with families of the crash victims, the filing said. This comes after adjustments were made to the process for selecting the independent monitor in response to objections from attorneys representing victims’ families, who argued that the families should have a say in the selection, rather than the government choosing from candidates proposed by Boeing.

Boeing confirmed it has reached an agreement in principle with the Justice Department. The company is trying to move forward, seeking approval for its planned acquisition of Spirit AeroSystems.

The settlement does not shield Boeing from any other potential investigations or charges, particularly in connection with an incident in January in which a panel broke off a new Boeing 737 MAX 9 aircraft during an Alaska Airlines flight. The settlement only covers conduct prior to the fatal crashes.

Boeing’s second $243.6 million fine is part of the maximum allowed under a previous $2.5 billion settlement in 2021, which was also related to the fatal crashes. The fine represents cost savings from avoiding full-flight simulator training for MAX pilots.

Some family members of the crash victims have expressed their intention to oppose the settlement, saying it makes concessions to Boeing that other criminal defendants would not receive and fails to adequately hold Boeing accountable for the deaths.

The Justice Department and Boeing are expected to document the full agreement in writing and file it in federal court in Texas by July 19.

Reuters contributed to this article.

This article was translated with the help of artificial intelligence. For more information, please see our Terms of Use.

 
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