Boeing has agreed to plead guilty to a criminal fraud conspiracy charge to resolve an investigation linked to two 737 MAX fatal crashes, a U.S. Justice Department official said, according to Reuters.
The plea, which must be approved by a federal judge, would brand the plane manufacturer a convicted felon and require it to pay a criminal fine of US$243.6 million.
The charge relates to two 737 MAX crashes in Indonesia and Ethiopia over a five-month period in 2018 and 2019 that killed 346 people and prompted the families of the victims to demand that Boeing face prosecution.
A Boeing spokesperson confirmed it had “reached an agreement in principle on terms of a resolution with the Justice Department.”
As part of the deal, the planemaker agreed to spend at least US$455 million over the next three years to boost safety and compliance programmes. Boeing’s board will have to meet with relatives of those killed in the MAX crashes, the filing said.
The deal also imposes an independent monitor, who will have to publicly file annual progress reports, to oversee the firm’s compliance. Boeing will be on probation during the monitor’s three-year term.
A guilty plea potentially threatens the company’s ability to secure lucrative government contracts with the likes of the U.S. Defence Department and NASA, although it could seek waivers.
Boeing became exposed to criminal prosecution after the Justice Department found the company violated a 2021 settlement involving the fatal crashes in May.
Still, the plea spares Boeing a contentious trial that could have exposed many of the company’s decisions leading up to the fatal MAX plane crashes to even greater public scrutiny. It would also make it easier for the company, which will have a new CEO later this year, to try to move forward as it seeks approval for its planned acquisition of Spirit AeroSystems.
Lawyers for some of the victims’ families said they planned to press Judge Reed O’Connor, who has been overseeing the case, to reject the deal.
In a separate document filed to the court, they cited O’Connor’s statement in a February 2023 ruling: “Boeing’s crime may properly be considered the deadliest corporate crime in U.S. history.”
The deal is a “slap on the wrist,” said Erin Applebaum, a lawyer at Kreindler & Kreindler LLP representing some of the victims’ relatives.
