BOEING SETTLES DOJ CRIMINAL CHARGE OVER 737 MAX FOR $2.5 BILLION
February 5, 2021
On January 7, 2021, Boeing was charged with defrauding regulators at the FAA during the development of the company’s 737 MAX, and has agreed to pay $2.5 billion to resolve the charges.
The Department of Justice said Boeing admitted in court documents that two of its employees, 737 MAX technical pilots, deceived an FAA group tasked with evaluating the aircraft’s designs about a flight control feature that has been implicated in two crashes, known as the Maneuvering Characteristics Augmentation System (MCAS). As a result, the Justice Department claims, “a key document published…lacked information about MCAS, and in turn, airplane manuals and pilot-training materials for U.S.-based airlines lacked information about MCAS.”
The $2.5 billion settlement consists of a criminal monetary penalty of $243.6 million, $1.77 billion in compensation to Boeing’s airline customers and a $500 million fund to compensate the heirs and relatives of the 346 victims of the two crashes. This is part of a deferred-prosecution agreement by which the charge will be dismissed after three years if Boeing meets several conditions, including agreeing to continue cooperating with the Justice Department in “ongoing or future investigations and prosecutions” and to strengthen its compliance program.
If you have any questions, please contact Evelyn Sahr (esahr@eckertseamans.com or 202-659-6622); Drew Derco (dderco@eckertseamans.com or 202-659-6665), or Andy Orr (aorr@eckertsemans.com or 202-659-6625).
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