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    Monday, July 8, 2024

    Boeing to Admit Guilt to Criminal Fraud Charge Arising from 737 Max Incidents


    Boeing has reached an agreement to plead guilty to a criminal fraud charge in connection with the tragic 737 Max accidents, as announced by the Justice Department on Sunday. This development comes after U.S. prosecutors alleged that the aerospace corporation breached a 2021 settlement that provided immunity from prosecution.

    In accordance with the terms of the agreement, Boeing has consented to the payment of a $243.6 million fine. Furthermore, an independent compliance monitor will be appointed to supervise Boeing’s adherence to regulations for a three-year probationary period. Additionally, Boeing is required to invest a minimum of $455 million in compliance and safety initiatives, as outlined in a court filing submitted by U.S. prosecutors on Sunday. The plea agreement is subject to the approval of a federal judge before it can be put into effect.

    Boeing further consented to a meeting between the board of directors and the families of the crash victims, as per the agreement.

    The plea deal offer presented Boeing with a critical decision: either accept the guilty plea and its associated conditions or proceed to trial. This decision arose at a pivotal moment for the company, as it strived to overcome its manufacturing and safety challenges, appoint a new CEO, and finalize the acquisition of Spirit AeroSystems, a key fuselage manufacturer.

    The admission of guilt may result in the aircraft manufacturer being labeled as a felon, potentially hindering its capacity to conduct business with the United States government. Notably, approximately 32% of Boeing’s substantial revenue of nearly $78 billion during the previous year was derived from its defense, space, and security division.

    “We can confirm that 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 said in a statement.

    In May, the Department of Justice alleged that Boeing was in breach of the 2021 accord. According to the terms of the deferred prosecution agreement, Boeing consented to pay $2.5 billion, which included an initial $243.6 million criminal penalty, restitution to airlines, and a $500 million fund for the families of the victims.

    The settlement reached In 2021 was set to expire two days after an incident involving a nearly new 737 Max 9 operated by Alaska Airlines on January 5th. Although the incident did not result in any major injuries, it has generated renewed safety concerns for Boeing.

    The United States government has alleged that Boeing engaged in a conspiracy to defraud the government by providing misleading information to regulators regarding the inclusion of a flight-control system on the Max aircraft, which was subsequently implicated in two fatal crashes: a Lion Air flight in October 2018 and an Ethiopian Airlines flight in March 2019. Tragically, all 346 individuals on board these flights lost their lives.

    On June 30, the U.S. prosecutors informed the victims’ family members of their intention to pursue a guilty plea agreement with Boeing. This proposed agreement was met with criticism from the family’s attorneys, who characterized it as a lenient and favorable arrangement for the company.”

    As counsel for the victims’ families, I intend to petition the presiding federal judge to decline the proposed settlement and instead schedule a public trial. This course of action will ensure a transparent and impartial airing of all relevant facts before a jury.”

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