Boeing agrees to plead guilty to criminal fraud charge over 737 Max crashes

Boeing will plead guilty to a criminal fraud charge stemming from two crashes of 737 Max jetliners that killed 346 people, the Justice Department has said, after the government determined the company violated an agreement that had protected it from prosecution for more than three years.

Federal prosecutors gave Boeing the choice last week of entering a guilty plea and paying a fine as part of its sentence or facing a trial on the felony criminal charge of conspiracy to defraud the United States.

Prosecutors accused the American aerospace giant of deceiving regulators who approved the airplane and pilot-training requirements for it.

The plea deal, which still must receive the approval of a federal judge to take effect, calls for Boeing to pay an additional $243.6 million fine. That was the same amount it paid under the 2021 settlement that the Justice Department said late Sunday that the company breached.

An independent monitor would be named to oversee Boeing's safety and quality procedures for three years. The deal also requires Boeing to invest at least $455 million in its compliance and safety programs.

'Deadly consequences of Boeing’s crime are being hidden'

The plea deal covers only wrongdoing by Boeing before the crashes in Indonesia and Ethiopia, which killed all 346 passengers and crew members aboard two new Max jets.

It does not give Boeing immunity for other incidents, including a panel that blew off a Max jetliner during an Alaska Airlines flight over Oregon in January, a Justice Department official said.

The deal also does not cover any current or former Boeing officials, only the corporation.

In a statement, Boeing confirmed it had reached a deal with the Justice Department but had no further comment.

In a filing Sunday night, the Justice Department said it expected to submit the written plea agreement with a US District Court in Texas by July 19. Lawyers for some of the relatives of those who died in the two crashes have said they will ask the judge to reject the agreement.

“This sweetheart deal fails to recognise that because of Boeing’s conspiracy, 346 people died. Through crafty lawyering between Boeing and DOJ, the deadly consequences of Boeing’s crime are being hidden,” said Paul Cassell, a lawyer for some of the families.

Federal prosecutors alleged Boeing committed conspiracy to defraud the government by misleading regulators about a flight-control system that was implicated in the crashes, which took place than less five months apart.

As part of the January 2021 settlement, the Justice Department said it would not prosecute Boeing on the charge if the company complied with certain conditions for three years.

Prosecutors last month alleged Boeing had breached the terms of that agreement.

US District Judge Reed O'Connor, who has overseen the case from the beginning, has criticised what he called “Boeing’s egregious criminal conduct.”

O'Connor could accept the plea and the sentence that prosecutors offered with it, or he could reject the agreement, likely leading to new negotiations between the Justice Department and Boeing.

A criminal conviction could jeopardise Boeing’s status as a federal contractor, according to some legal experts. The plea announced Sunday does not address that question, leaving it to each government agency whether to bar Boeing.

Hours before the hearing, the Senate investigations subcommittee released a 204-page report with new allegations from a whistleblower who said he worried that defective parts could go into 737s.

The whistleblower was the latest in a string of current and former Boeing employees who have raised safety concerns about the company and claimed they faced retaliation as a result.