DOJ announces multi-billion dollar settlement with Boeing over 737 MAX fraud conspiracy charges News
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DOJ announces multi-billion dollar settlement with Boeing over 737 MAX fraud conspiracy charges

The US Department of Justice announced Thursday that prosecutors have reached an agreement with the Boeing Company that resolved a criminal charge involving Boeing’s 737 MAX airplane. The charge had been brought following the 737 MAX crashes of Lion Air Flight 610 and Ethiopian Airlines Flight 302 in 2018 and 2019, which resulted in more than 300 deaths, and the grounding of the national 737 MAX fleet in March 2019 over ongoing safety concerns. The agreement involves Boeing paying a multi-billion dollar settlement in exchange for federal prosecutors dropping criminal charges against the company.

Federal prosecutors alleged that Boeing engaged in an internal conspiracy to defraud the United States by failing to be fully transparent with the Federal Aviation Administration’s Aircraft Evaluation Group (FAA AEG) during their evaluation of the highly profitable 737 MAX. Of particular consequence was the AEG’s evaluation of the Maneuvering Characteristics Augmentation System (MCAS), a software that caused unrecoverable nosedives which caused the fatal Flight 610 and 302 crashes.

The Department of Justice alleged that Boeing did not adequately communicate essential details of MCAS’ operation to the AEG and failed to include such information in airplane manuals and pilot-training materials. Further allegations charged Boeing with continuing to conceal information on MCAS changes and safety with the FAA despite the 737 MAX being used by airlines globally, which likely played a role in preventing the Lion Air and Ethiopian Airlines pilots from being able to respond to the MCAS errors in their planes.

Boeing’s agreement means they will pay more than $2.5 billion, comprising a criminal monetary penalty, compensation payments to 737 MAX airline customers who were hit financially by the 737 MAX’s grounding , and a crash-victim beneficiaries fund to compensate the heirs, relatives, and legal beneficiaries of the passengers killed in 737 MAX crashes.

Boeing will additionally be required to cooperate closely with the FAA and Department of Justice on any future investigations and to submit regular reports on its compliance with US fraud laws. However, Boeing will not face criminal charges, ensuring it can continue its lucrative defense contracts with the US government without violating federal rules prohibiting the use of contractors with felony convictions.

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