Boeing has agreed to plead guilty to a criminal fraud conspiracy charge to settle a U.S. Justice Department investigation related to two fatal 737 MAX crashes, according to a court filing made late on Sunday. This plea, pending federal judge approval, will label Boeing as a convicted felon and result in a $243.6 million criminal fine.
The charge stems from two crashes involving 737 MAX aircraft in Indonesia and Ethiopia between 2018 and 2019, which resulted in the deaths of 346 people. These incidents prompted victim families to demand that Boeing face prosecution. A guilty plea could jeopardize Boeing’s ability to secure government contracts with entities like the U.S. Defense Department and NASA, although waivers might be sought.
By pleading guilty, Boeing avoids a trial that could have further exposed its decisions leading up to the crashes. The company, which will soon have a new CEO, aims to move forward and seek approval for its planned acquisition of Spirit AeroSystems.
Boeing confirmed reaching an agreement in principle with the Justice Department. As part of the settlement, Boeing will invest at least $455 million over the next three years to enhance its safety and compliance programs. A third-party monitor will oversee the company’s compliance and report annually to the court. Boeing will also serve a probation period during which it must not violate any laws until the monitor's term ends.
The Justice Department offered Boeing a plea agreement on June 30, giving the company until the end of the week to accept or face trial for conspiring to defraud the Federal Aviation Administration (FAA) regarding a key software feature linked to the crashes.
Boeing's crisis deepened with a January 2021 incident involving a 737 MAX 9 jet, which exposed ongoing safety issues. The new plea agreement only addresses Boeing's actions before the crashes and does not protect the company from future investigations or charges related to other incidents.
Boeing will plead guilty to making false representations to the FAA about expanding a key software feature to operate at low speeds, which saved the company money by reducing pilot training requirements. The software, known as the Maneuvering Characteristics Augmentation System (MCAS), was designed to push the airplane’s nose down in specific conditions and was linked to the two crashes that led to a 20-month grounding of the 737 MAX.
As part of the agreement, Boeing’s board of directors will meet with the relatives of those who died in the crashes. The Justice Department has modified the selection process for an independent monitor to include input from the victims' families.
Some families of the crash victims plan to oppose the plea deal, arguing it unfairly favors Boeing and fails to hold the company accountable for the deaths. The agreement does not protect Boeing executives from potential charges, although individual prosecutions are unlikely due to the statute of limitations. A former Boeing chief technical pilot was previously charged but acquitted in connection with the fraud agreement.
The penalty marks Boeing’s second $243.6 million fine related to the crashes, contributing to a total of $2.5 billion in settlements. Families of the victims have criticized previous agreements and urged the Justice Department to seek up to $25 billion from Boeing. The Justice Department has held several meetings with the victims' families during its investigation.
The Justice Department and Boeing plan to finalize the written plea agreement and file it in federal court in Texas by July 19.
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