Boeing will plead guilty to a criminal fraud charge stemming from two crashes of 737 Max jetliners, the Justice Department said late Sunday, 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 US$243.6 million fine.

That was the same amount it paid under the 2021 settlement that the Justice Department said 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.

The plea deal covers only wrongdoing by Boeing before the crashes in Indonesia and in Ethiopia. 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 the 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 U.S. 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 recognize 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.

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.

U.S. District Judge Reed O’Connor, who has overseen the case from the beginning, has criticized 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.

Boeing, which blamed two low-level employees for misleading the regulators, tried to put the crashes behind it. After grounding Max jets for 20 months, regulators let them fly again after the company reduced the power of the flight software. Max jets logged thousands of safe flights and orders from airlines picked up, increasing to about 750 in 2021, about 700 more in 2022 and nearly 1,000 in 2023.

Source: Travelweek