Boeing has agreed to plead guilty to a criminal fraud charge over the fatal 737 Max crashes, the Justice Department said.
This move comes months after US prosecutors alleged the aerospace company violated a 2021 settlement, which had shielded it from prosecution.
As part of the plea deal, Boeing will pay a $243.6 million fine and install an independent compliance monitor for three years during probation.
As detailed in a court filing by US prosecutors, the company must invest at least $455 million in compliance and safety programs.
The agreement also mandates Boeing’s board of directors meet with crash victims’ families.
The deal, which requires federal judge approval, posed a critical decision for Boeing: plead guilty with attached terms or face a trial.
This is pivotal as the company seeks to overcome its manufacturing and safety crises, appoint a new CEO, and acquire fuselage maker Spirit AeroSystems.
A guilty plea would label Boeing as a felon.
This could potentially complicate its ability to sell products to the US government, a significant revenue source, as 32 percent of its nearly $78 billion revenue last year came from its defense, space, and security unit.
Boeing confirmed reaching an agreement in principle with the Justice Department, pending the finalization and approval of specific terms.
The backdrop to this plea deal includes Boeing’s violation of the 2021 deferred prosecution agreement, under which it had agreed to pay $2.5 billion.
This amount included the original $243.6 million criminal fine, compensation to airlines, and a $500 million fund for victims’ family members.
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This agreement was due to expire shortly after a new 737 Max 9, operated by Alaska Airlines, experienced a door panel blowout in January, sparking a new safety crisis for Boeing.
The US government accused Boeing of conspiracy to defraud by misleading regulators about a flight-control system implicated in the two crashes: a Lion Air flight in October 2018 and an Ethiopian Airlines flight in March 2019, which together claimed 346 lives.
On June 30, prosecutors informed victims’ family members of their plan to seek a guilty plea from Boeing.
Family attorneys criticized the plea deal as a “sweetheart deal,” and lawyer Paul Cassell plans to request that the federal judge reject it and set the matter for a public trial to ensure all facts are openly aired before a jury.
