Boeing to Pay $2.5 Billion to Resolve US Criminal Probe into 737 MAX Crashes; Not Forced to Plead Guilty to Criminal Charges

Boeing Co will pay over $2.5 billion to resolve the US criminal probe into two deadly 737 MAX crashes that killed 346 people. The incident also led to the grounding of its 737 MAX jetliner.

The settle will allow Boeing to avoid prosecution, and will include a fine of $243.6 million, compensation to airlines of $1.77 billion and a $500 million crash-victim fund over fund conspiracy charges related to the plane’s flawed design. The Justice Department said that the fine was at the low end of the sentencing guidelines, and represents the amount of money the company saved by not implementing full-flight simulator training for the 737 MAX. The Justice Department also said that the company will not be forced to plead guilty to criminal charges.

Boeing said that it would take a $743.6 million charge against its fourth-quarter 2020 earnings to reflect the deferred prosecution agreement.

Acting Assistant Attorney General David Burns said in a statement accompanying the agreement that the crash exposed fraudulent and deceptive conduct by employees of one of the world’s leading commercial airplane manufacturers.

He further said that, “Boeing’s employees chose the path of profit over candor by concealing material information from the FAA concerning the operation of its 737 MAX airplane and engaging in an effort to cover up their deception”.

Under Thursday’s agreement, the company has agreed to adopt a new compliance program or to modify its existing one, to ensure it maintains an effective compliance program and system of internal controls to root out fraud.