Boeing has agreed to pay $2.5 billion to resolve a criminal charge connected to the information it provided regarding the evaluation of its 737 MAX jets, two of which crashed, killing 346 people.
The Department of Justice said Thursday the manufacturer conspired to defraud the Federal Aviation Administration’s Aircraft Evaluation Group of needed information.
Boeing agreed to a deferred prosecution of the case, which is being handled in the Northern District of Texas, the DOJ said.
Under the terms of the deal, Boeing will pay $243.6 million in a penalty and another $1.77 billion in compensation to customers.
It also will establish a $500 million fund to compensate heirs, relatives and legal beneficiaries of the passengers who died in the demise 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.”
U.S. Attorney Erin Nealy Cox said the case shows the DOJ will hold manufacturers accountable when they are not honest with regulators.
“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.
In court documents, Boeing said its pilots deceived regulators about the aircraft’s Maneuvering Characteristics Augmentation System, which impacted the flight control system of the Boeing 737 MAX.
Consequently, federal officials said, a document published by the FAA AEG lacked information about MCAS. In turn, airplane manuals and pilot-training materials for U.S.-based airlines lacked information about MCAS.
Changes made between a prior version of the 737 and the 737 MAX were critical, the DOJ said.
Two Boeing pilots discovered information about an important change to MCAS but concealed it, the DOJ charged.
“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 U.S.-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,” the DOJ said.
The Lion flight crashed in October 2018 and the Ethiopian flight in March 2019.
Officials said the MCAS was activated when the jets crashed and may have played a role in the disasters.
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