WASHINGTON, DC - 18 JUNE: Boeing CEO Dave Calhoun arrives as family members of those killed in the Ethiopian Airlines Flight 302 and Lion Air Flight 610 crashes hold up photographs of their loved ones before a Senate Homeland Security and Governmental Affairs Investigations Subcommittee hearing on Boeing's broken safety culture on Capitol Hill on 18 June 2024 in Washington, D.C. Calhoun says he is "here to take responsibility" as he testifies before the Senate to discuss ongoing quality and safety issues after a new 737 Max 9 airplane's door panel blew out mid-flight during an Alaska Airlines flight in January. (Photo by Andrew Harnik/Getty Images)

Boeing Agrees to Plead Guilty to Criminal Fraud Charge

By Claire Meyer

8 July 2024

Airplane manufacturer Boeing accepted a deal to plead guilty to a criminal fraud charge related to two crashes of 737 Max jets in 2018 and 2019, according to the U.S Department of Justice (DOJ). The two crashes killed 346 people.

As part of the deal, Boeing will pay a $243.6 million fine, which adds onto a $243 million fine the company already paid. The company will also invest at least $455 million in its compliance and safety programs—a 75 percent increase over what the company had been annually spending on the programs. It will be put on probation for three years, and it will be subject to an independent compliance monitor, NPR reported.

The latest deal follows a 2021 DOJ/Boeing deferred prosecution agreement when the company promised to improve safety after the two crashes in Indonesia and Ethiopia. At the time, Boeing agreed to pay $2.5 billion—$1.77 billion was paid to airlines that had to ground planes after the crashes, and $500 million was put in a fund to compensate family members. But prosecutors allege that Boeing didn’t hold up its end of the bargain, especially after a door-plug panel blew off a 737 Max jet in midair in January.

As part of the deal, Boeing will plead guilty to conspiracy to defraud the United States—specifically, the lawful function of the Federal Aviation Administration (FAA) Aircraft Evaluation Group. By pleading guilty, Boeing avoids a public criminal trial.

“Had Boeing gone to trial, it would have faced a highly publicized, drawn out and damaging legal battle,” Newsweek reported. “The discovery process likely would have exposed more of Boeing's internal practices and decisions leading up to the crashes, possibly resulting in higher fines, harsher penalties, and severe reputational damage.”

The plea does give Boeing a criminal record, though, which could complicate the company’s contracts with the U.S. government. So far, the deal has not outright disqualified Boeing from securing future government contracts.

Families of people killed in the two crashes vehemently disagreed with the plea deal, with the daughter of one victim calling the plea an “atrocious abomination,” the BBC reported. Many families claim the plea doesn’t include sufficient admission of guilt from Boeing. In a separate filing on 7 July, attorneys for the families said they will ask a judge to reject the deal because it fails to hold Boeing suitably accountable for the deaths. The victims’ families wanted the aircraft manufacturer to pay $24.8 billion.

The DOJ argued that the penalties Boeing agreed to were the most serious available and that the oversight concession and safety and compliance improvements were victories, according to CNN.

“This resolution protects the American public,” said the DOJ’s statement. “Boeing will be required to make historic investments to strengthen and integrate its compliance and safety programs. This criminal conviction demonstrates the department’s commitment to holding Boeing accountable for its misconduct.”

The deal does not exempt Boeing from other legal challenges, including individual criminal charges and misconduct allegations.