BOEING will plead guilty to a criminal fraud charge stemming from two deadly crashes of 737 Max jetliners after the government determined the company violated an agreement that had protected it from prosecution for more than three years, the Justice Department said Sunday night.
Federal prosecutors gave Boeing the choice this week of entering a guilty plea and paying a fine as part of its sentence or facing a trial on the felony criminal charge of conspiracy to defraud the United States.
Prosecutors accused the American aerospace giant of deceiving regulators who approved the airplane and pilot-training requirements for it.
The plea deal, which still must receive the approval of a federal judge to take effect, calls for Boeing to pay an additional $243.6 million fine. That was the same amount it paid under the 2021 settlement that the Justice Department said the company breached. An independent monitor would be named to oversee Boeing’s safety and quality procedures for three years.
The plea deal covers only wrongdoing by Boeing before the crashes, which killed all 346 passengers and crew members aboard two new Max jets. It does not give Boeing immunity for other incidents, including a panel that blew off a Max jetliner during an Alaska Airlines flight in January, a Justice Department official said.
The deal also does not cover any current or former Boeing officials, only the corporation.
In a court filing Sunday night, the Justice Department said it expected to file the written plea agreement with the court by July 19.
Federal prosecutors alleged Boeing committed conspiracy to defraud the government by misleading regulators about a flight-control system that was implicated in the crashes, which took place in Indonesia in October 2018 and Ethiopia less than five months later.
As part of the January 2021 settlement, the Justice Department said it would not prosecute Boeing on the charge if the company complied with certain conditions for three years. Prosecutors last month alleged Boeing had breached the terms of that agreement.
The company’s guilty plea will be entered in US District Court in Texas. The judge overseeing the case, who has criticized what he called “Boeing’s egregious criminal conduct,” could accept the plea and the sentence that prosecutors offered with it or he could reject the agreement, likely leading to new negotiations between the Justice Department and Boeing.
Relatives of the people who died in the crashes were briefed on the plea offer a week ago and, at the time, said they would ask the judge to reject it.
US agencies can use a criminal conviction as grounds to exclude companies from doing business with the government for a set amount of time. Boeing is an important contractor of the Defense Department and NASA.
The case goes back to the crashes in Indonesia in 2018 and in Ethiopia in 2019. The Lion Air pilots in the first crash did not know about flight-control software that could push the nose of the plane down without their input. The pilots for Ethiopian Airlines knew about it but were unable to control the plane when the software activated based on information from a faulty sensor.
The Justice Department charged Boeing in 2021 with deceiving FAA regulators about the software, which did not exist in older 737s, and about how much training pilots would need to fly the plane safely. The department agreed not to prosecute Boeing at the time, however, if the company paid a $2.5 billion settlement, including the $243.6 million fine, and took steps to comply with anti-fraud laws for three years.
Boeing, which blamed two low-level employees for misleading the regulators, tried to put the crashes behind it. After grounding Max jets for 20 months, regulators let them fly again after Boeing reduced the power of the flight software. Max jets logged thousands of safe flights and orders from airlines picked up, increasing to about 750 in 2021, about 700 more in 2022 and nearly 1,000 in 2023.
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