Boeing to plead guilty to conspiracy to defraud FAA Aircraft Evaluation Group


An American Airlines plane just before making a landing with a body of water in the background
Enlarge / An American Airlines Boeing 737 MAX 8 aircraft approaches San Diego International Airport for a landing on June 28, 2024.

Getty Images | Kevin Carter

Boeing has agreed to plead guilty to a criminal charge and pay $243.6 million for violating a 2021 agreement that was spurred by two fatal crashes. The US government notified a judge of Boeing’s plea agreement in a July 7 filing in US District Court for the Northern District of Texas.

“The parties have agreed that Boeing will plead guilty to the most serious readily provable offense,” the Department of Justice said. If accepted by the court, the deal would allow Boeing to avoid a trial.

Families of victims said in a filing yesterday that they will urge the court to reject the deal at a plea hearing. “The families intend to argue that the plea deal with Boeing unfairly makes concessions to Boeing that other criminal defendants would never receive and fails to hold Boeing accountable for the deaths of 346 persons,” their lawyers wrote.

The deal stems from Boeing 737 Max crashes in 2018 and 2019 in Indonesia and Ethiopia. After the crashes, Boeing was charged with conspiracy to defraud the Federal Aviation Administration in connection with the agency’s evaluation of the 737 Max.

Conspiracy to defraud FAA

“Boeing will plead guilty to the offense charged in the pending one-count Criminal Information, conspiracy to defraud the United States, specifically, the lawful function of the Federal Aviation Administration Aircraft Evaluation Group,” the US government filing said.

In January 2021, Boeing signed a deferred prosecution agreement and agreed to pay $2.5 billion in penalties and compensation to airline customers and the victims’ families. In May 2024, the Justice Department said it determined that Boeing violated the deferred prosecution agreement “by failing to design, implement, and enforce a compliance and ethics program to prevent and detect violations of the US fraud laws throughout its operations.”

The DOJ determined that Boeing violated the 2021 agreement several months after the January 2024 incident in which a 737 Max 9 used by Alaska Airlines made an emergency landing because a door plug blew off during a flight. Boeing initially said it believed that it honored the terms of the agreement but ultimately agreed to plead guilty to the charge for conspiracy to defraud the FAA.

“The parties have agreed in principle to the material terms of a plea agreement that would, among other things, hold Boeing accountable for its material misstatements to the Federal Aviation Administration, require Boeing to pay the statutory maximum fine, require Boeing to invest at least $455 million in its compliance and safety programs, impose an independent compliance monitor, and allow the Court to determine the restitution amount for the families in its discretion, consistent with applicable law,” the DOJ court filing said.

Boeing will agree to a fine of $243.6 million, which will be doubled to $487.2 million, and is “the maximum criminal fine for the charged offense,” the DOJ said. But “the new plea agreement will recommend that when imposing the sentence, the Court credit the $243.6 million criminal monetary penalty Boeing previously paid pursuant to the [deferred prosecution agreement], with the net result being that Boeing will have to pay another $243.6 million fine.”

Boeing hasn’t agreed on further restitution to victims’ families, but the court could order an additional payment. Boeing agreed to be subject to an independent compliance monitor for three years.

Victims’ families oppose plea deal

Families of the victims of Lion Air Flight 610 and Ethiopian Airlines Flight 302 crashes “have expressed their intention to oppose this (or any) plea agreement,” the DOJ noted. The government said it “conferred with the families, airline customers, and their representatives” and “formulated the plea offer based in part on the feedback” it received.

The DOJ court filing said Boeing will not receive immunity for any other “conduct that may be the subject of any ongoing or future Government investigation of the Company.”

There could also be prosecutions of individuals at Boeing. “DOJ is resolving only with the company—and providing no immunity to any individual employees, including corporate executives, for any conduct,” the agency said in a statement quoted by CNN.

Under the plea agreement, restitution for families would be determined by the court. “The plea agreement will allow the Court to determine the restitution amount for the families in its discretion, consistent with applicable legal principles… Boeing will retain the right to appeal any restitution order it believes was not legally imposed,” the government said.

Because families intend to oppose the plea agreement, the government said it will “meet and confer with all stakeholders on a briefing schedule.” A lawyer for victims’ families asked “that the Court schedule a plea hearing no sooner than late July to allow adequate time for the families to make travel arrangements to attend in person,” the DOJ said.

“This sweetheart deal fails to recognize that because of Boeing’s conspiracy, 346 people died. Through crafty lawyering between Boeing and DOJ, the deadly consequences of Boeing’s crime are being hidden,” Paul Cassell, a lawyer for the families, said.

Boeing did not comment on the specifics of the plea deal. “We can confirm that 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,” the company said in a statement provided to Ars.



Source link

About The Author

Scroll to Top