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Thursday, January 28, 2021

Boeing Pays $2.5 Billion to Settle 737 Max Fraud Charge

Boeing has agreed to pay a $2.5bn fine to resolve a fraud charge of misleading federal aviation regulators assigned to inspect the safety of the 737 Max.

Boeing has agreed to pay a $2.5bn fine to resolve a fraud charge of misleading federal aviation regulators assigned to inspect the safety of the 737 Max.

The US Department of Justice announced Boeing has entered into a deferred prosecution agreement (DPA)  after being charged with fraud at the Northern District of Texas. 

The Justice Department said Boeing officials had hidden modifications from the FAA on their automated flight control system, known as MCAS, that allegedly caused crashes in Indonesia and Ethiopia in 2018 and 2019.

Of the $2.5bn,  $500m will go to families of the 346 people killed in the 737 crashes.

“The tragic crashes of Lion Air Flight 610 and Ethiopian Airlines Flight 302 exposed fraudulent and deceptive conduct by employees of one of the world’s leading commercial airplane manufacturers,” said Acting Assistant Attorney General David P. Burns of the Justice Department’s Criminal Division.

David Calhoun, Boeing’s chief executive, said to Boeing employees that entering the deferred prosecution agreement was the right thing for them to do.

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