Guilty: Boeing admits fraud in 737 Max plane crashes that killed 346

Boeing has agreed to plead guilty to a criminal fraud conspiracy charge after the U.S. Department of Justice (DOJ) found that the company violated a reform agreement established following two fatal crashes of its 737 Max planes.

These crashes, which took place in 2018 and 2019, tragically resulted in the deaths of 346 passengers and crew members. The DoJ announced that Boeing will also pay a criminal fine of $243.6 million, which aligns with the amount previously settled in 2021.

Despite this, the families of the victims have voiced their discontent, labeling the agreement as a “sweetheart deal” that allows Boeing to evade full accountability.

By opting to plead guilty, Boeing avoids the spectacle of a criminal trial, which the families had been fervently advocating for.

Agreement with the Justice Department

Boeing confirmed that it has reached a preliminary agreement with the Justice Department on the terms of a resolution, which is subject to the finalization and approval of specific details.

“We can confirm that we have reached an agreement in principle on terms of a resolution with the Justice Department, subject to the memorialization and approval of specific terms,” Boeing stated .

History of the 737 Max crashes

Boeing’s safety record came under intense scrutiny following the near-identical crashes of the 737 Max aircraft operated by Lion Air in October 2018 and Ethiopian Airlines in March 2019.

Both incidents were linked to a flaw in the MCAS (Maneuvering Characteristics Augmentation System) flight control software, which erroneously activated and forced the planes into nosedives shortly after takeoff, resulting in the deaths of all onboard.

In response, the 737 Max was globally grounded for over a year as investigations ensued. In 2021, Boeing was charged with conspiracy to defraud regulators, particularly the Federal Aviation Administration (FAA), by concealing crucial information about the MCAS system.

To avoid prosecution, Boeing agreed to pay $2.5 billion, including a $243 million criminal penalty and $500 million to a victims’ fund, alongside enhanced compliance measures and a three-year monitoring period.

However, the near-catastrophic incident in January 2023, where a door panel of a Boeing aircraft operated by Alaska Airlines blew out shortly after takeoff, prompted the DoJ to reassess the 2021 agreement. While no injuries occurred, the incident cast doubt on Boeing’s progress in improving safety standards.

Legal and reputational fallout

In May, the DoJ declared that Boeing had violated the terms of the 2021 agreement, paving the way for prosecution. Boeing’s decision to plead guilty marks a significant blow to its reputation, as it now possesses a criminal record.

This development could have serious implications for Boeing’s status as a major military contractor and one of the world’s leading manufacturers of commercial jets.

Although the impact of the criminal record on Boeing’s contracting business remains uncertain, the government typically restricts firms with criminal records from bidding on contracts unless a waiver is granted.

Paul Cassell, a lawyer representing some of the victims’ families, criticized the plea deal, stating , “The memory of 346 innocents killed by Boeing demands more justice than this.”

He urged the DoJ to impose a fine exceeding $24 billion in a letter to the government.

As reported by BBC , Ed Pierson, executive director of the Foundation for Aviation Safety and a former senior manager at Boeing, echoed these sentiments, describing the plea as “seriously disappointing” and “a terrible deal for justice.” He argued that the deal effectively grants Boeing another “get out of jail free card” instead of holding individuals accountable.