Boeing is pleading guilty to defrauding the FAA regarding a crucial software feature used on the MAX to operate at low speeds, according to a court filing made by the government on Sunday.
A spokesperson for Boeing confirmed that the company had reached an agreement in principle regarding a resolution with the Justice Department and agreed to invest at least $455 million over the next three years to enhance its safety and compliance programs, as outlined in the filing.
Boeing's Criminal Conviction
Boeing faced criminal prosecution after the Justice Department determined in May that the company breached a 2021 settlement related to the fatal crashes.
The proposed plea deal, subject to judicial approval, would classify Boeing as a convicted felon due to its involvement in crashes in Indonesia and Ethiopia between 2018 and 2019, which resulted in the deaths of 346 people, and pay a criminal fine amounting to $243.6 million, as outlined by the DOJ in a court filing in Texas detailing the preliminary agreement.
While the plea agreement avoids a contentious trial that could have intensified public scrutiny of Boeing's actions leading up to the crashes, this resolution also facilitates Boeing's efforts to move forward under new leadership, expected later this year, and pursue regulatory approval for its intended acquisition of Spirit AeroSystems.
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Boeing's Plea Deal
As part of the agreement, Boeing's board of directors will meet with relatives of those who died in the MAX crashes.
According to the court filing, DOJ officials also adjusted their procedure for selecting an independent monitor after facing criticism from a lawyer representing victims' relatives who argued that families should choose the monitor instead of the government selecting from a pool of candidates proposed by Boeing.
The agreement does not provide immunity for any executives. However, charges against individuals are considered unlikely due to the statute of limitations, such as in a related case where a former Boeing chief technical pilot who was charged with fraud was acquitted by a jury in 2022, CNBC reported.
The penalty agreed upon marks Boeing's second fine of $243.6 million in connection to the fatal crashes. This amount reaches the maximum allowable amount, which corresponds to the cost Boeing saved by opting against implementing full-flight simulator training for MAX pilots.
According to the court filing, the DOJ and Boeing are collaborating to finalize and document the complete written plea agreement, which they plan to file in federal court in Texas by July 19.
Lawyers for some of the families of the people killed in the two MAX crashes stated in a separate court filing that they plan to oppose the deal because it unfairly grants concessions to the company that would not typically be offered to other criminal defendants, asserting it fails to adequately hold Boeing accountable for the deaths of 346 individuals.
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