US: Boeing agrees to admit fraud in investigation into fatal crashes of two 737 MAX planes

The criminal file concerned the crashes of the two 737 MAX

Screenshot 1 5 Boeing, USA

Boeing has agreed to plead guilty to criminal conspiracy to commit fraud to end the US Justice Department's investigation into the fatal crashes of two 737 MAX planes, the government said late Sunday.

For its part, Boeing announced to Agence France-Presse that it had "signed an agreement" with the US Department of Justice in the criminal case related to the crashes of the two 737 MAXs in 2018 and 2019 that claimed the lives of 346 people. "We have entered into an agreement in principle on the terms of a settlement with the Department of Justice," Boeing said in its statement.

The agreement in principle, which requires the approval of a federal judge, would make the airline industry a convicted felon. Boeing will also pay a criminal penalty of $243,6 million, the US Justice Department said in a document it filed in a Texas federal court regarding the preliminary agreement. The class involves two MAX 737 crashes in Indonesia (Lion Air) and Ethiopia (Ethiopian Airlines) over a five-month period in 2018 and 2019 that killed 346 people, whose families have demanded that Boeing be prosecuted.

The guilty plea potentially threatens the company's ability to secure lucrative government contracts with the US Department of Defense and NASA, for example, although it can seek immunity. Boeing found itself exposed to criminal prosecution after the Justice Department found in May that the company violated a 2021 settlement related to those fatal crashes.

But the guilty plea spares Boeing from a contentious trial that would potentially expose to even more scrutiny many of the company's decisions that led to the fatal MAX plane crashes. It also makes it easier for the company, which will get a new chief executive later this year, to try to move forward as it seeks approval for its planned acquisition of Spirit AeroSystems.

A Boeing spokesman confirmed that "an agreement in principle has been reached on the terms of a settlement with the Department of Justice."

As part of the deal, the aircraft maker also agreed to invest at least $544 million over the next three years to strengthen its safety and compliance programs.

The Ministry of Justice will appoint a third party to monitor the company's compliance with the agreements. Said third party should file annual reports on the company's progress with the court. Boeing will also have a probation period, during which it pledges not to violate any law, until the end of the probationer's three-year term.

On June 30, the Justice Department offered Boeing a plea deal and gave the company until the end of the week to accept the deal or face trial on charges of conspiring to defraud the US Civil Aviation Administration ( FAA) in relation to a major software feature linked to fatal plane crashes.