US Justice Department to Charge Boeing With Fraud Over Fatal 737 MAX Crashes

The US Justice Department is set to criminally charge Boeing with fraud over two fatal crashes involving its 737 MAX jets, according to sources. The department plans to formally offer a plea agreement to Boeing, which includes a substantial financial penalty and the imposition of an independent monitor to audit the company's safety and compliance practices for the next three years.

Officials from the Justice Department will give Boeing until the end of the week to respond to the nonnegotiable offer. Should Boeing refuse to plead guilty, prosecutors are prepared to take the company to trial. Neither Boeing nor the Justice Department has commented on the matter, though Reuters was the first to report the department's decision.

Why This Matters: The decision to charge Boeing follows the department’s finding that the company violated a 2021 agreement that previously shielded it from prosecution related to the fatal crashes. These crashes, which occurred in 2018 and 2019, resulted in the deaths of 346 people. This move deepens the crisis surrounding Boeing, exposing it to further financial consequences and increased government oversight.

A guilty plea could have significant implications for Boeing's ability to secure government contracts, including those with the US military, which form a substantial portion of its revenue. Although companies with felony convictions can obtain waivers, it remains unclear how the proposed plea deal will address this issue.

The Justice Department shared its decision with the victims' families during a call, revealing that the proposal would require Boeing to plead guilty to conspiring to defraud the US Federal Aviation Administration in connection with the crashes. The push for a guilty plea comes on the heels of a January in-flight blowout on a Boeing 737 MAX 9 jet during an Alaska Airlines flight, which exposed ongoing safety and quality issues at the company.

The proposed agreement includes a $487.2 million financial penalty, though Boeing would only need to pay half due to credit for a previous settlement related to the Lion Air and Ethiopian Airlines crashes. This penalty represents the maximum legally allowed for the charge.

Key Takeaways:

• Boeing faces fraud charges over two fatal 737 MAX crashes.
• The plea deal includes financial penalties and an independent monitor.
• Failure to plead guilty could result in a trial for Boeing.
• Criminal charges impact Boeing's ability to secure government contracts.
• The proposed penalty totals $487.2 million, with credits for previous settlements.