Boeing will plead guilty to criminal fraud over 737 Max crashes

Boeing has agreed to plead guilty to a US criminal fraud charge stemming from the crashes of two 737 Max jetliners, angering the families of the hundreds of passengers killed who had wanted the case to go to trial.

Federal prosecutors had found that the American aircraft manufacturer was in violation of a 2021 agreement struck after the crashes, which had protected it from prosecution for more than three years.

Last week they gave Boeing the choice 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 US over the crashes, which claimed 346 lives.

Under the new plea deal, which must receive the approval of a federal judge to take effect, Boeing will pay a $243.6m (£190m) fine, according to a justice department (DoJ) document filed in federal court in Texas.

The company has also agreed to invest at least $455m over the next three years to strengthen its safety and compliance programmes, the department said.

In October 2018, 189 people were killed when Lion Air flight 610 fell into the Java Sea off Indonesia. In March 2019, Ethiopian Airlines flight 302 crashed shortly after take off from Addis Ababa airport, claiming 157 lives.

In 2021, federal prosecutors alleged that Boeing committed conspiracy to defraud the government by misleading regulators about a flight-control system that was implicated in the crashes. However, they agreed not to prosecute if the company paid a penalty and successfully completed a three-year period of increased monitoring and reporting.

However, in January a panel blew off a Max jetliner during an Alaska Airlines flight , forcing it to land. Although nobody was hurt, scrutiny on Boeing’s safety record ramped up again and in May the Department of Justice found it had violated the 2021 deal, reopening the prospect of prosecution.

Relatives of the Max crash victims were briefed on the agreement a week ago and labelled it a “sweetheart plea deal” that spared Boeing the scrutiny of a criminal trial.

They objected in a filing, saying the deal “unfairly makes concessions to Boeing that other criminal defendants would never receive, and fails to hold Boeing accountable for the deaths … the generous plea agreement rests on deceptive and offensive premises”.

Paul Cassell, who represents 15 victims’ families, said the deal was “clearly not in the public interest” and appealed to the judge to “reject this inappropriate plea and simply set the matter for a public trial”.

Sanjiv Singh, counsel for 16 families of crash victims, said: “This was a sweetheart deal, and so Boeing accepting it is par for the course. Now the fight – and there will be one – under relevant statutes and rules of criminal procedure.”

The families also expressed frustration about the size of the financial penalty. “Without a hefty fine, there will be zero safety impact at Boeing,” Erin Applebaum, another attorney acting for relatives, said last week. “The fine should have been in the billions, not the millions.”

The Department of Justice did not immediately respond to a request for comment on the objection. In its filing to the court regarding the proposed plea deal, it claimed that it had given the families “numerous opportunities” to express their views and they had “meaningfully and substantially” taken part in several conferral meetings.

Families were particularly angered when informed late last month that Boeing would be able to appoint its own corporate monitor to oversee the company. The plea agreement addresses this specific concern, stating that the government will appoint the monitor.

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

However, it also makes it easier for the company, which will have a new CEO later this year, to move forward as it seeks approval for its planned acquisition of Spirit AeroSystems.

The deal does not give Boeing immunity for other incidents, including January’s cabin panel blowout.

“While many of us would have preferred a more vigorous prosecution, a guilty plea to a felony is a serious step up in accountability from the initial deferred prosecution agreement,” said Mark Lindquist, an attorney representing a family of an Ethiopian crash victim and 31 passengers from the Alaskan Airlines flight.

The deal also does not cover any current or former Boeing officials, only the corporation.

A Boeing spokesperson said: “We can confirm that we have reached an agreement in principle on terms of a resolution with the justice department, subject to the memorialisation and approval of specific terms.”