FORT WORTH, Texas (CN) — Boeing will plead guilty to one count of conspiracy and the company’s board will pay over $940 million after the crashes of two 737 Max aircraft that killed 346 people, federal prosecutors told a federal judge Wednesday evening.
Prosecutors say in the proposed plea agreement filed Wednesday that the Virginia-based aerospace manufacturer will plead guilty to conspiracy to defraud the Federal Aviation Administration Aircraft Evaluation Group.
Prosecutors write in five-page proposed plea agreement that the company agreed that “Boeing breached the terms of the deferred prosecution agreement by failing to sufficiently design, implement, and enforce a compliance and ethics program to prevent and detect violations of U.S. fraud laws throughout its operations.”
Boeing agreed to pay a criminal fine of $243.6 million, which is in addition to $243.6 million in fines it paid under a deferred prosecution agreement reached with the Trump administration in 2021.
Two of Boeing’s 737 Max pilots were accused of deceiving the Federal Aviation Administration in 2017 about the Maneuvering Characteristics Augmentation System software, which was designed to push the nose of the 737 Max down to prevent stalling.
Boeing reportedly added the software due to the 737 Max’s larger, more fuel-efficient LEAP1-B engines requiring higher mounting points on the wing, which changed the center of gravity of the plane compared to earlier models of the 737.
The Federal Aviation Administration grounded the 737 Max on March 13, 2019, after the deadly crashes of Lion Air Flight 610 five months earlier and Ethiopian Airlines Flight 302 three days earlier. The FAA allowed the 737 Max to return to service on Nov. 18, 2020.
Federal prosecutors rescinded the deferred prosecution agreement in May after a door plug on a 737 Max 9 blew out mid-flight on Alaska Airlines Flight 1282 in early 2024.
Boeing also agreed Wednesday to three years of probation and will pay over $455 million towards “investment in compliance, quality and safety,” according to prosecutors. Boeing will also be required to retain an independent compliance monitor. According to prosecutors, the monitor will “prepare a confidential annual report for the government, and file on the public court docket an executive summary of that annual report.
To satisfy the terms of probation, Boeing’s board of directors agreed to meet with the families and attorneys of the crash victims within four months of the company’s sentencing.
The families swiftly denounced the guilty plea as a “sweetheart” deal when it was first announced on July 1 and have vowed to appear in-person before U.S. District Judge Reed O’Connor in Fort Worth to argue against it.
Prosecutors stipulated in the Wednesday proposal that “the government retains the right to support any legally authorized claim for restitution presented by a family,” though Boeing will retain the right to contest any of family’s claims. The court is also to not require Boeing pay restitution to airline customers or their families.
They also say “the plea agreement will not provide Boeing with immunity for any other conduct, including any conduct that may be the subject of any ongoing or future government investigation of the company.”
Federal prosecutors have so far only taken one criminal case regarding the 737 Max to trial, accusing former Boeing chief test pilot Mark Forkner of lying to the FAA and airlines about the MCAS software. A Fort Worth federal jury acquitted Forkner of four counts of wire fraud in 2022 after deliberating for one hour. He faced up to 80 years in federal prison.