Boeing Admits to Fraud in Settlement Over 737 MAX Crashes, Agrees to Pay $455 Million for Safety Improvements
Fiona Nanna, ForeMedia News
4 minutes read. Updated 11:32AM GMT Mon, 8 July, 2024
Boeing has reached a settlement with the US Department of Justice (DoJ) regarding two fatal 737 MAX crashes, court documents reveal. The agreement stipulates that the aviation giant will plead guilty to fraud charges.
This development follows the conclusion by prosecutors that Boeing violated an earlier settlement related to the disasters, which claimed the lives of 346 people in Ethiopia and Indonesia over five years ago.
“We have reached an agreement in principle on terms of a resolution with the Justice Department, subject to the memorialization and approval of specific terms,” Boeing announced in a statement to AFP.
According to court documents filed in Texas on Sunday, Boeing has agreed to plead guilty to “conspiracy to defraud the United States” during the certification of the MAX airplanes. Under the terms of the deal, Boeing will face fines and is required to invest a minimum of $455 million in compliance and safety programs. Compensation for the victims’ families will be determined by the court.
The latest legal challenge for Boeing arose from a DoJ determination in mid-May that the company failed to comply with a 2021 deferred prosecution agreement (DPA). This agreement, which followed the MAX crashes, required Boeing to enhance its compliance and ethics programs.
Families of the MAX crash victims expressed deep dissatisfaction with the agreement between Boeing and the DoJ. Robert A. Clifford, a senior partner at Clifford Law, representing the families, stated, “Much more evidence has been presented over the last five years that demonstrates that the culture of Boeing putting profits over safety hasn’t changed. This plea agreement only furthers that skewed corporate objective.” The families intend to request the court to reject the plea deal at an upcoming hearing.
The initial DPA, announced in January 2021, charged Boeing with knowingly defrauding the Federal Aviation Administration (FAA) during the MAX certification process. The agreement required Boeing to pay $2.5 billion in fines and restitution in exchange for immunity from criminal prosecution. This probationary period was set to expire this year. However, in January, Boeing faced another crisis when a 737 MAX operated by Alaska Airlines had to make an emergency landing due to a fuselage panel failure mid-flight.
In a letter dated May 14 to the US court, DoJ officials stated that Boeing breached its DPA obligations by failing to design, implement, and enforce a compliance and ethics program to prevent and detect violations of US fraud laws.
For more details on Boeing’s legal battles and aviation industry updates, visit Aviation Today.
