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Boeing charged with criminal conspiracy and fined $2.5 billion 737 Max coverup

An employee works near a Boeing 737 Max aircraft at Boeing’s 737 Max production facility in Renton, Washington, U.S. December 16, 2019.

Lindsey Wasson | Reuters

Boeing agreed to pay more than $2.5 billion to settle criminal charges with the U.S. Justice Department, which accused the company of concealing information about its 737 Max airplane that was involved in two crashes that claimed 346 lives, federal prosecutors announced Thursday.

Prosecutors said Boeing “knowingly and willfully, and with the intent to defraud, conspired” to defraud the United States by undermining the Federal Aviation Administration’s ability to evaluate the safety of the plane.

According to the deferred prosecution agreement, the Federal Aviation Administration wasn’t “fully informed” about the capabilities of a flight-control system on the planes, a software that was later implicated in the two crashes.

“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,” Acting Assistant Attorney General David P. Burns of the Justice Department’s Criminal Division, wrote in a release. “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.”

The crashes plunged Boeing its worst-ever crisis, sparking a worldwide grounding of its best-selling plane, numerous investigations, including the Justice Department’s roughly two-year probe, and hurting the reputation of one what was the world’s biggest aircraft manufacturer.

Boeing shares were down about 1% in afterhours trading after the news broke.

The company admitted to the wrongdoing and waived its rights to a trial as part of the deal to settle the charges.

“This is a substantial settlement of a very serious matter, and I firmly believe that entering into this resolution is the right thing for us to do — a step that appropriately acknowledges how we fell short of our values and expectations,” CEO Dave Calhoun said in a note to Boeing employees.

This is breaking news. Please check back for updates.


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