MIAMI – Boeing has entered into an agreement with the Department of Justice (DoJ) to settle a criminal charge related to a plot to defraud the Aircraft Evaluation Group of the Federal Aviation Administration (FAA AEG) in connection with its evaluation of Boeing’s 737 MAX aircraft.
According to a DoJ Public Affairs press release from today, Boeing entered into a deferred prosecution agreement (DPA) in connection with a criminal information filed today in the Northern District of Texas. The criminal information charges the company with one count of conspiracy to defraud the United States.
The manufacturer will pay a cumulative criminal monetary sum of over US$2.5bn under the terms of the DPA.
The sum consists of a criminal monetary penalty of US$243.6m, compensation payments of US$1.77bn to Boeing’s 737 MAX airline customers, and the establishment of a US$500m crash-victim fund to compensate the heirs, families, 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.
Comments from Justice Department, District of Texas Attorneys
“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. This resolution holds Boeing accountable for its employees’ criminal misconduct, addresses the financial impact to Boeing’s airline customers, and hopefully provides some measure of compensation to the crash-victims’ families and beneficiaries.”
“The misleading statements, half-truths, and omissions communicated by Boeing employees to the FAA impeded the government’s ability to ensure the safety of the flying public,” said U.S. Attorney Erin Nealy Cox for the Northern District of Texas.
“This case sends a clear message: The Department of Justice will hold manufacturers like Boeing accountable for defrauding regulators – especially in industries where the stakes are this high.”
Boeing Admits Wrongdoing
As Boeing admitted in court papers, Boeing misled the FAA AEG through two of its 737 MAX Flight Technical Pilots about a significant aircraft component called the Maneuvering Characteristics Augmentation System (MCAS) that affected the aircraft’s control system.
Owing to their deception, there was a lack of information about MCAS in a key document released by the FAA AEG, and in consequence, airplane manuals and Pilot training materials for US-based airlines omitted MCAS information.
Featured image: Boeing Headquarters.Photo: Boeing