US Seeks Guilty Plea From Boeing Over Fraud in Fatal Crashes

The US Justice Department will seek a guilty plea from Boeing over criminal charges of fraud with respect to the two fatal 737 MAX accidents.

It has been now been revealed that the U.S. Department of Justice will present a plea deal to Boeing for violating a 2021 agreement related to the two fatal accidents involving 737 MAX aircraft in 2018 and 2019.

In essence, the DOJ will now seek a guilty plea from Boeing with respect to criminal fraud in the matter.

The US plane manufacturer will have until the end of this week to either accept or reject the offer.

Background

The U.S. Department of Justice originally charged Boeing with criminal fraud in connection with the fatal crashes of two 737 MAX aircraft.

The two fatal accidents in 2018 and 2019 resulted in the deaths of a total of 346 people.

The charges stemmed from Boeing’s alleged misleading information provided to the Federal Aviation Administration (FAA) during the evaluation of the 737 MAX’s safety features. This alleged deception is what constituted the criminal fraud charge.

Boeing opted to resolve the charges through a deferred prosecution agreement (DPA). In a DPA, the company admits to wrongdoing but avoids a formal criminal conviction.

As part of the agreement, Boeing paid over $2.5 billion. This included a criminal penalty, compensation to airlines who flew the 737 MAX, and a fund to assist the families of the crash victims.

Family members of the crash victims have criticized the settlement deal, arguing that the US manufacturing giant is getting off too lightly.

In May this year, the US Department of Justice indicated that it was again bringing criminal charges against Boeing over a potential violation of their 2021 agreement.

Attorney Statement for Families of Victims

A statement has been made by attorney Erin Applebaum, a partner at Kreindler & Kreindler LLP, which represents 34 families who lost loved ones on Ethiopian Airlines Flight 302:

“The 737 MAX families vigorously oppose the shameful new sweetheart deal between Boeing and the Department of Justice.”

“While falsely depicting itself as a punishment for Boeing since it includes a guilty plea, the deal levies a negligible fine, imposes a monitor for just three years.”

“This allows Boeing to hand-select that monitor, and most egregiously, completely fails to mention or recognize the dignity of the 346 people murdered by Boeing’s negligence.”

“We look forward to our day in court so we can tell Judge O’Connor and the public why the court should reject this deal and not allow Boeing to once again escape true accountability.”

“And when there is inevitably another Boeing crash and DOJ seeks to assign blame, they will have nowhere else to look but in the mirror.”

What Does a Criminal Conviction Potentially Mean?

Many companies find themselves faced with criminal charges, but they tend to be smaller companies compared to the US plane manufacturing giant Boeing.

Typically, companies faced with criminal charges will seek an avenue of civil pleadings rather than risk the fallout of a criminal conviction.

A criminal conviction for Boeing fraud following the 737 MAX crashes would have had significant repercussions beyond the initial fines.

Here’s a breakdown of the potential consequences:

Financial Penalties: Criminal fines would likely be much steeper than those imposed in the deferred prosecution agreement (DPA). This could significantly impact Boeing’s finances and potentially affect shareholder value.
Loss of Government Contracts: A criminal conviction could make Boeing ineligible for certain government contracts, especially those related to defense or aviation. This would be a major blow, considering a significant portion of Boeing’s revenue comes from government contracts.
Reputational Damage: A conviction would undoubtedly damage Boeing’s reputation and erode public trust. This could lead to a decline in sales, difficulty attracting new business partners, and negative publicity for years to come.
Compliance Issues: A criminal conviction would likely trigger stricter compliance regulations and oversight for Boeing. This could lead to increased costs and delays in production and development.
Legal Challenges: A conviction could open Boeing up to a wave of lawsuits from victims’ families, airlines, and other parties who suffered losses due to the crashes. This could lead to further financial strain and legal battles.