Boeing to plead guilty to criminal fraud over 737 Max deaths as family decries ‘slap on wrist’ deal

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Louise Thomas

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Boeing will plead guilty to a fraud charge in order to avoid a criminal trial over two fatal 737 MAX crashes, in a deal which the families of the victims have criticised as a “slap on the wrist”.

The company has agreed to pay a fine of $243.6m to resolve a US Justice Department investigation into two incidents in Indonesia and Ethiopia over a five-month period in 2018 and 2019 that killed 346 people, the government said in a court filing on Sunday.

The settlement, which still requires a judge’s approval, drew swift criticism from victims’ families who wanted Boeing to face a trial and suffer harsher financial consequences.

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.

The American aerospace giant is accused of deceiving regulators who approved the airplane and its pilot training requirements.

The Justice Department’s investigation has deepened an ongoing crisis engulfing Boeing since a mid-flight window blow-out in January exposed continuing safety and quality issues at the planemaker.

A guilty plea potentially threatens the company’s ability to secure lucrative government contracts with the likes of the US Defense Department and Nasa, although it could seek waivers.

But it spares the planemaker a contentious trial that could have exposed the company’s decisions ahead of the fatal crashes to even greater public scrutiny.

The deal is nothing more than a “slap on the wrist”, said Erin Applebaum, a lawyer at Kreindler & Kreindler LLP representing some of the victims’ relatives.

Lawyers for some of the victims’ families said they planned to press Judge Reed O’Connor, who has been overseeing the case, to reject the deal.

In a separate document filed to the court, they cited Judge O’Connor’s statement in a February 2023 ruling that “Boeing‘s crime may properly be considered the deadliest corporate crime in US history”.

A Boeing spokesperson confirmed it had “reached an agreement in principle on terms of a resolution with the Justice Department”.

As part of the deal, the planemaker agreed to spend at least $455m over the next three years to boost safety and compliance programmes.

Boeing‘s board will also have to meet with relatives of those killed in the MAX crashes, the filing said.

And the deal imposes an independent monitor, who will have to file public progress reports annually, to oversee the firm’s compliance. Boeing will be on probation during the monitor’s three-year term.

The plea deal only covers wrongdoing by Boeing before the crashes, which killed all 346 passengers and crew members aboard two new Max jets. It does not give Boeing immunity for other incidents, including the one where a window panel blew off a Max jetliner during an Alaska Airlines flight in January, a Justice Department official said.

Additional reporting by agencies