Boeing charged for criminal conspiracy, agrees to pay USD 2.5 million in compensation

Washington [US], January 8 : The Boeing Company on Thursday (local time) agreed to pay over USD 2.5 million to resolve a criminal charge with the US Department of Justice after being accused of concealing information on two Boeing 737 MAX crashes that resulted in the deaths of 346 passengers.
According to a press release, Boeing entered into a deferred prosecution agreement (DPA) in connection with a criminal information filed on Thursday. The criminal information detailed a conspiracy to defraud the Federal Aviation Administration's Aircraft Evaluation Group (FAA AEG) in connection with the FAA AEG's evaluation of Boeing's 737 MAX airplane.
The company admitted that it deceived the FAA AEG, through two of its 737 MAX Flight Technical Pilots, about an important aircraft part called the Maneuvering Characteristics Augmentation System (MCAS) that impacted the flight control system of the Boeing 737 MAX. Due to the deception, a key document published by the FAA AEG lacked information about MCAS, and in turn, airplane manuals and pilot-training materials for US-based airlines lacked information about MCAS.
Under the terms of the DPA, Boeing will pay a total criminal monetary amount of over $2.5 billion, composed of a criminal monetary penalty of USD 243.6 million, compensation payments to Boeing's 737 MAX airline customers of USD 1.77 billion, and the establishment of a USD 500 million crash-victim beneficiaries fund to compensate the heirs, relatives, and legal beneficiaries of the 346 passengers who died in the Boeing 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," said Acting Assistant Attorney General David P. Burns of the Justice Department's Criminal Division.
"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," he added.
As part of the DPA, Boeing has agreed, among other things, to continue to cooperate with the Fraud Section in any ongoing or future investigations and prosecutions. As part of its cooperation, Boeing is required to report any evidence or allegation of a violation of U.S. fraud laws committed by Boeing's employees or agents upon any domestic or foreign government agency (including the FAA), regulator, or any of Boeing's airline customers.
In addition, Boeing has agreed to strengthen its compliance program and to enhanced compliance program reporting requirements.
"The misleading statements, half-truths, and omissions communicated by Boeing employees to the FAA impeded the government's ability to ensure the safety of the flying public," said US Attorney Erin Nealy Cox for the Northern District of Texas. "This case sends a clear message: The Department of Justice will hold manufacturers like Boeing accountable for defrauding regulators - especially in industries where the stakes are this high."
"We continue to mourn alongside the families, loved ones, and friends of the 346 individuals who perished on Lion Air Flight 610 and Ethiopian Airlines Flight 302. The deferred prosecution agreement reached today with The Boeing Company is the result of the Office of Inspector General's dedicated work with our law enforcement and prosecutorial partners," said Special Agent in Charge Andrea M Kropf, Department of Transportation Office of Inspector General (DOT-OIG) Midwestern Region. "This landmark deferred prosecution agreement will forever serve as a stark reminder of the paramount importance of safety in the commercial aviation industry, and that integrity and transparency may never be sacrificed for efficiency or profit."
In and around November 2016, two of Boeing's 737 MAX Flight Technical Pilots, one who was then the 737 MAX Chief Technical Pilot and another who would later become the 737 MAX Chief Technical Pilot, discovered information about an important change to MCAS, according to the release.
Instead of sharing information about this change with the FAA AEG, Boeing, through these two 737 MAX Flight Technical Pilots, concealed this information and deceived the FAA AEG about MCAS. Because of this deceit, the FAA AEG deleted all information about MCAS from the final version of the 737 MAX FSB Report published in July 2017. In turn, airplane manuals and pilot training materials for US-based airlines lacked information about MCAS, and pilots flying the 737 MAX for Boeing's airline customers were not provided any information about MCAS in their manuals and training materials.
On Oct. 29, 2018, Lion Air Flight 610, a Boeing 737 MAX, crashed shortly after takeoff into the Java Sea near Indonesia. All 189 passengers and crew on board died. On March 10, 2019, Ethiopian Airlines Flight 302, a Boeing 737 MAX, crashed shortly after takeoff near Ejere, Ethiopia, which resulted in the deaths of 157 passengers and crew on board.
In both crashes, the FAA AEG learned that MCAS activated during the flight and may have played a role in the crash, said the release.