Boeing To Plead Guilty To Criminal Fraud Charge Over 737 Max Crashes

(RTTNews) - Boeing Co. has agreed with the Department of Justice to plead guilty to a criminal fraud charge in connection with two 737 Max crashes in Indonesia and Ethiopia that killed 346 people in total. With the agreement, the company will be able to avoid a criminal trial over the crashes, which so far have caused the aerospace and defence major billions in claims and in penalties.

In a filing with the U.S. District Court in Texas, the Government said Boeing would pay a $487.2 million as maximum criminal fine for the charged offense.

Boeing will also make a sustained monetary investment in its compliance and safety programs, specifically at least around $455 million over the term of probation, which will run longer than three years.

The parties have agreed in principle to the material terms of a plea agreement that would, among other things, hold Boeing accountable for its material misstatements to the Federal Aviation Administration, require the firm to pay the statutory maximum fine, and impose an independent compliance monitor for three years. It will also allow the Court to determine the restitution amount for the families in its discretion, consistent with applicable law.

The Government stated that Boeing will not be charged with any other criminal offense related to the conduct.

Boeing and DOJ expect to file written plea agreement with the Court by no later than July 19. Meanwhile, the families of the victims of the Lion Air Flight 610 and Ethiopian Airlines Flight 302 airplane crashes intend to oppose the plea agreement and have requested an opportunity to brief their opposition, the Government noted.

In March 2019, 737 MAX, which was then the world's biggest-selling aircraft, was grounded worldwide following the two crashes within just six months, which together claimed 346 lives.

Boeing reportedly paid more than $2.5 billion in 2021 to settle criminal charges related to a conspiracy to defraud the FAA related to its 737 MAX investigation.

Meanwhile, the DOJ in May this year alleged that the company had breached the terms of the 2021 agreement that allowed the aircraft maker to avoid criminal prosecution.

The news comes as Boeing is under severe scrutiny over recent safety issues. In April, the FAA announced an investigation into the emergency landing by Southwest Airlines' Boeing 737-800 flight after its engine cover fell off and struck the wing flap during take-off.

Earlier, in January, a mid-cabin door plug on Alaska Airlines' Boeing 737-9 MAX airplane blew out in the middle of the flight.

Following the Alaska incident, the FAA grounded around 171 737 MAX 9 airplanes for inspections for several weeks, and also started a probe into Boeing's manufacturing practices and production lines, including those involving subcontractor Spirit AeroSystems. The Justice Department had also initiated a criminal investigation into the MAX 9 incident.

In early March, the FAA announced that its production audit of Boeing and Spirit AeroSystems identified multiple quality control lapses, and halted production expansion of the Boeing 737 MAX.