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Boeing has reached an agreement to pay over $2.5 billion to resolve a fraud conspiracy charge from the Department of Justice in connection to the Federal Aviation Administration’s evaluation of the company's 737 Max airplane.
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The criminal information charges Boeing with one count of conspiracy to defraud the United States for concealing information from regulators investigating the 737 Max crashes of Lion Air Flight 610 and Ethiopian Airlines Flight 302.
“The tragic crashes of Lion Air Flight 610 and Ethiopian Airlines Flight 302 exposed fraudulent and deceptive conduct by employees of one of the world’s leading commercial airplane manufacturers,” Acting Assistant Attorney General David P. Burns of the Justice Department’s Criminal Division said in a statement. “Boeing’s employees chose the path of profit over candor by concealing material information from the FAA concerning the operation of its 737 Max airplane and engaging in an effort to cover up their deception. This resolution holds Boeing accountable for its employees’ criminal misconduct, addresses the financial impact to Boeing’s airline customers, and hopefully provides some measure of compensation to the crash-victims’ families and beneficiaries.”
Under the terms of the deferred prosecution agreement, Boeing will pay a $234.6 million criminal montery penalty and $1.77 billion in compensation payments to Boeing's 737 Max airline customers. In addition, a $500 million crash-victim beneficiaries fund will be established to compensate the heirs, relatives, and legal beneficiaries of the 346 passengers who died in the two crashes.
A spokesperson for Boeing did not immediately return FOX Business' request for comment.
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According to court documents, Boeing admitted to deceiving the FAA’s Aircraft Evaluation Group after two of its technical pilots concealed information about the 737 Max's Maneuvering Characteristics Augmentation System (MCAS), which impacts the aircraft’s flight control system.
As a result, a key document published by the FAA AEG, airplane manuals and pilot-training materials for U.S.-based airlines lacked information about MCAS.
This is a developing story. Please check back for updates.
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