Boeing Will Plead Guilty To Fraud Charge—Avoiding Trial Over 737 Max Crashes

Published 3 days ago
By Forbes | Siladitya Ray
US-AVIATION-BOEING
(Photo by JASON REDMOND/AFP via Getty Images)

TOPLINE

Boeing has agreed to plead guilty to a fraud conspiracy charge in a deal with the Justice Department to avoid facing trial in a federal criminal case linked to deadly crashes involving two 737 Max planes that killed 346 people in 2018 and 2019.

KEY FACTS

In a court filing late on Sunday, the Justice Department said Boeing will plead guilty to the felony charge of “conspiracy to defraud the United States, specifically, the lawful function of the Federal Aviation Administration Aircraft Evaluation Group.”

As part of the deal, Boeing agreed to pay an additional fine of $243.6 million—the same penalty the company had paid as part of a settlement in 2021 that it was later accused of violating.

Advertisement

The filing notes that Boeing’s total fine of $487.2 million is the maximum allowed under law for the charged offenses.

The plane maker will also be required to invest approximately $455 million over the next three years to improve its compliance and safety programs.

The deal will have to be approved by a federal judge to take effect.

WHAT TO WATCH FOR

The plea deal only covers Boeing’s actions in the lead-up to the fatal crashes of two 737 Max planes in 2018 and 2019. It does not offer the company immunity in any other incidents—including one in January in which a door plug blew off an Alaskan Airlines flight minutes after take off. Boeing still faces a separate criminal probe over the incident.

Advertisement

KEY BACKGROUND

In October 2018, a Boeing 737 Max, operated by Indonesian low-cost carrier Lion Air, crashed into the Java Sea minutes after take off, killing all 189 passengers and crew onboard. In March 2019, a similar crash of an Ethiopian Airlines 737 Max resulted in the death of all 157 people on board. The crashes caused civil aviation authorities around the world to ground all variants of the 737 Max. In 2021, Boeing agreed to a $2.5 billion settlement to avoid criminal charges and admitted to misleading investigators about the safety of the planes. The settlement included a fine of $243.6 million, $1.77 billion in payment to airlines affected by the 737 Max’s grounding, and $500 million to families of the passengers killed in the two crashes. In May this year, the DOJ accused Boeing of violating the settlement.

SECTION TITLE

Justice Department Planning Fraud Charge Against Boeing (Forbes)

Advertisement