The Justice Department said Tuesday that Boeing breached a 2021 prosecution agreement protecting it from charges over two deadly 737 Max crashes in 2018 and 2019, according to multiple outlets, meaning the aerospace company is now open to criminal prosecution, but it is unclear at this point whether prosecutors will pursue charges.
Boeing agreed to pay $2.5 billion to settle the 2021 fraud charge. (Photo by Stephen Brashear/Getty Images)
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Key Takeaways
- Boeing violated the agreement by “failing to design, implement, and enforce a compliance and ethics program to prevent and detect violations of the U.S. fraud laws throughout its operations,” NBC reported, citing a statement from the Justice Department.
- Specifically, Boeing could be hit with a conspiracy to defraud the U.S. charge it avoided with the deal, which included an agreement for Boeing to pay $2.5 billion to settle allegations it concealed information from the Federal Aviation Administration about the operation of its 737 Max following the two crashes that killed 346 people.
- Boeing will have 30 days to respond to the decision while prosecutors will tell the court no later than July 7 whether it intends to move forward with charges, the Associated Press reported.
- Boeing told Forbes in an email it believes it “honoured the terms of the agreement and looks forward to the opportunity to respond.”
Big Number
$2.5 billion. That’s the total amount Boeing agreed to pay as part of the settlement. The figure includes $1.77 billion in compensation payments to Boeing’s 737 Max airline customers, the establishment of a $500 million crash-victim beneficiary fund and a $243.6 million criminal monetary penalty.
Key Background
The first crash took place in 2018 off the coast of Indonesia, where a Boeing 737 MAX crashed shortly after takeoff, killing all 189 passengers and crew members. The second crash also occurred shortly after takeoff following a departure from Ejere, Ethiopia, in 2019. All 157 passengers and crew on board died.
Investigations into the two crashes scrutinised the 737 Max’s flight stabilising part known as the Manoeuvring Characteristics Augmentation System, which was added to the airplane model without the knowledge of pilots or airlines. Boeing admitted in court documents it deceived the FAA about the part and information related to the part’s operation, overhauling it after the second crash. Boeing was forced to ground its 737 Max planes for 20 months.
