Boeing will plead guilty to one count of criminal fraud stemming from Two 737 Max planes crash that killed 346 people, after the US government concluded that the company breached an agreement which had protected her from prosecution for more than three years, the Justice Department said Sunday night.
Federal prosecutors last week gave Boeing the option of pleading guilty and paying a fine as part of its sentence, or going to trial on the criminal charge of conspiracy to defraud the U.S.
Prosecutors accused the US aerospace giant of misleading regulators who licensed the plane and the training requirements for pilots to fly it.
The settlement, which still requires approval from a federal judge to take effect, calls for Boeing to pay an additional $243.6 million in penalties. That’s the same amount it paid under the 2021 settlement that the company breached, according to the Justice Department. An independent observer will be appointed to oversee its safety and quality procedures for three years. The settlement also requires Boeing to invest at least $455 million in its safety and compliance programs.
The plea only covers Boeing’s violations before the crashes of the two new Max planes, which killed all 346 passengers and crew. It does not give Boeing immunity for other incidents such as the detachment of a fuselage section from an Alaska Airlines Max plane during a flight in January, a Justice Department official said.
The settlement also does not cover any current or former Boeing employees, only the corporation. The company confirmed in a statement that it had reached an agreement with the Justice Department, but declined to comment further.
In a court document filed Sunday night, the Justice Department said it expected to file the plea agreement in writing with the court by July 19. Attorneys for some of the families of those killed in the two crashes have said they will ask the judge to reject the agreement.
“This sweetheart deal fails to acknowledge that 346 people died as a result of Boeing’s conspiracy. Through clever legal work between Boeing and the Justice Department, the deadly consequences of Boeing’s crime are being obscured,” said Paul Cassell, a lawyer for some of the families.
Federal prosecutors alleged that Boeing conspired to defraud the government by providing misleading information to regulators about a flight control system that was implicated in the crashes, which occurred in Indonesia in October 2018 and in Ethiopia less than five months later.
As part of the January 2021 agreement, the Justice Department said it would not prosecute Boeing on that charge if the company met certain conditions for three years. Prosecutors alleged last month that Boeing had breached the terms of that pact.
The plea is set to be entered in a district court in Texas. The judge overseeing the case, who has criticized what he described as Boeing’s “outrageous criminal conduct,” could accept the plea deal and the sentence proposed by prosecutors or could reject the deal, which would likely lead to new negotiations between the Justice Department and Boeing.
The case dates back to crashes in Indonesia and Ethiopia. The Lion Air pilots in the first crash were not aware of flight control software that could push the nose of the plane down without their intervention. The Ethiopian Airlines pilots knew about it, but were unable to control the plane when the software was activated based on information from a failing sensor.
The Justice Department accused Boeing in 2021 of misleading Federal Aviation Administration regulators about the software, which did not exist on older 737 models, and how much training pilots would need to safely operate the plane. The department agreed not to prosecute Boeing at the time if the company paid $2.5 billion in damages, including the $243.6 million fine, and took steps to comply with anti-fraud laws for three years.
Boeing, which blamed two low-level employees for misleading regulators, has tried to put the crashes behind it. After grounding the Max jets for 20 months, regulators allowed them to fly again after Boeing reduced the power of the flight software. Max jets have made thousands of safe flights, and airline orders have grown, to about 750 in 2021, about 700 more in 2022 and nearly 1,000 in 2023.
The Arlington, Virginia-based firm sells to dozens of airlines around the world. Top 737 Max customers include Southwest, United, American, Alaska, Ryanair and flydubai.
That changed in January, when a piece covering a disused emergency exit flew off a Max during an Alaska Airlines flight over Oregon.
The pilots landed the 737 Max safely and no one suffered serious injuries, but the incident has heightened scrutiny of the company. The Justice Department has opened a new investigation, the FBI has told passengers on the Alaska flight that they may be victims of a crime and the FAA has said it will step up its oversight of Boeing.
A criminal conviction would jeopardize Boeing’s standing as a federal government contractor, according to some legal experts. The settlement announced Sunday does not address that issue, leaving it up to each government agency to decide whether to ban Boeing.
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