Boeing has agreed to plead guilty to a charge of conspiracy to defraud the Federal Aviation Administration’s Aircraft Evaluation Group in relation to the evaluation of Boeing’s 737 MAX airplane. The company entered into a deferred prosecution agreement with the Department of Justice, which includes a criminal monetary penalty of $243.6 million, compensation payments to Boeing’s 737 MAX airline customers of $1.77 billion, and the establishment of a $500 million crash-victim beneficiaries fund.
The fund is intended to compensate the heirs, relatives, and legal beneficiaries of the 346 passengers who died in the Boeing 737 MAX crashes of Lion Air Flight 610 and Ethiopian Airlines Flight 302.
“The tragic crashes of Lion Air Flight 610 and Ethiopian Airlines Flight 302 exposed fraudulent and deceptive conduct by employees of one of the world’s leading commercial airplane manufacturers,” said Acting Assistant Attorney General David P. Burns of the Justice Department’s Criminal Division. “Boeing’s employees chose the path of profit over candor by concealing material information from the FAA concerning the operation of its 737 Max airplane and engaging in an effort to cover up their deception.”
As part of the agreement, Boeing has agreed to continue to cooperate with the Fraud Section in any ongoing or future investigations and prosecutions. The company is also required to report any evidence or allegation of a violation of U.S. fraud laws committed by Boeing’s employees or agents upon any domestic or foreign government agency, regulator, or any of Boeing’s airline customers. In addition, Boeing has agreed to strengthen its compliance program and to enhanced compliance program reporting requirements.
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