Boeing to pay USD 2.5 million to resolve criminal charge
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.