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Boeing to plead guilty to fraud in U.S. probe of fatal 737 MAX crashes


 , Updated 14:33, 08-Jul-2024


Boeing has agreed to plead guilty to a criminal fraud conspiracy charge to resolve a U.S. Justice Department investigation linked to two 737 MAX fatal crashes, the government said in court filing late on Sunday.

The plea, which requires a federal judge's approval, would brand the planemaker a convicted felon. Boeing will also pay a criminal fine of $243.6 million, the Justice Department (DOJ) said in a document filed in federal court in Texas that provided an overview of the agreement in principle.

The charge relates to two 737 MAX crashes in Indonesia and Ethiopia over a five-month period in 2018 and 2019 that killed 346 people and prompted the families of the victims to demand that Boeing face prosecution.

A guilty plea potentially threatens the company's ability to secure lucrative government contracts with the likes of the U.S. Defense Department and NASA, although it could seek waivers.

Boeing became exposed to criminal prosecution after the Justice Department in May found the company violated a 2021 settlement involving the fatal crashes.

Still, the plea spares Boeing a contentious trial that could have exposed many of the company's decisions leading up to the fatal MAX plane crashes to even greater public scrutiny. It would also make it easier for the company, which will have a new CEO later this year, to try to move forward as it seeks approval for its planned acquisition of Spirit AeroSystems.

A Boeing spokesperson confirmed it had "reached an agreement in principle on terms of a resolution with the Justice Department." The planemaker also agreed to invest at least $455 million over the next three years to strengthen its safety and compliance programs, according to the filing.

The DOJ will appoint a third-party monitor to oversee the firm's compliance. The monitor will have to publicly file with the court annual reports on the company's progress. 

Boeing will also serve a probation, during which it commits not to violate any laws, until the end of the monitor's three-year term. 

The DOJ on June 30 offered a plea agreement to Boeing and gave the company until the end of the week to take the deal or face a trial on a charge of conspiring to defraud the Federal Aviation Administration (FAA) in connection with a key software feature tied to the fatal crashes.

Source(s): Reuters
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