FILE – With protesters in the audience, Boeing CEO Dave Calhoun arrives at a Senate subcommittee hearing to answer to lawmakers about troubles at the aircraft manufacturer. Ike Riffel , a California father whose two sons, died in 2019 when a Boeing 737 Max jetliner crashed in Ethiopia, fears that instead of putting Boeing on trial, the government will offer the company another shot at corporate probation through a legal document called a deferred prosecution agreement, or DPA. (AP Photo/J. Scott Applewhite, File)
New York, United States — Boeing said Monday it had reached a deal with the US Department of Justice over two fatal 737 MAX crashes, which court papers show would see the aviation giant plead guilty to fraud.
The agreement comes after prosecutors concluded Boeing flouted an earlier settlement addressing the disasters, in which 346 people were killed in Ethiopia and Indonesia more than five years ago.
READ: Boeing in turmoil: Incidents and investigations
“We have reached an agreement in principle on terms of a resolution with the Justice Department, subject to the memorialization and approval of specific terms,” Boeing told AFP in a statement.
Court papers filed in Texas on Sunday said the company had agreed to plead guilty to “conspiracy to defraud the United States” during the certification of MAX airplanes.
Boeing will be fined under the deal and must invest a minimum of $455 million in “compliance and safety programs”, while compensation for families will be determined by the court.
Boeing’s latest legal predicament was triggered by a DoJ determination in mid-May that the company ignored a 2021 deferred prosecution agreement (DPA) by not meeting requirements to improve its compliance and ethics program after the MAX crashes.
Families of MAX victims were “highly disappointed” by the deal reached between Boeing and the DoJ, an attorney at Clifford Law representing them said.
“Much more evidence has been presented over the last five years that demonstrates that the culture of Boeing putting profits over safety hasn’t changed. This plea agreement only furthers that skewed corporate objective,” senior partner Robert A. Clifford said in a statement.
READ: Boeing posts $355-M loss as it tries to dig out from under crisis
The families will ask the court to reject the plea deal at an upcoming hearing, according to an opposition filed by their legal team.
The original DPA was announced in January 2021, over charges that Boeing knowingly defrauded the Federal Aviation Administration during the certification of the MAX.
The agreement required Boeing to pay $2.5 billion in fines and restitution in exchange for immunity from criminal prosecution.
A three-year probationary period was set to expire this year. But in January, Boeing was plunged back into crisis mode when a 737 MAX flown by Alaska Airlines was forced to make an emergency landing after a fuselage panel blew out mid-flight.
In a May 14 letter to the US court, DoJ officials said that Boeing breached its obligations under the DPA by “failing to design, implement, and enforce a compliance and ethics program to prevent and detect violations of the US fraud laws throughout its operations.”