Boeing, a US-based multinational manufacturer and seller of commercial airplanes, has signed a deferred prosecution agreement (DPA) with the US Department of Justice to resolve a criminal charge against it. The charge is of conspiracy to defraud the Federal Aviation Administration’s Aircraft Evaluation Group (FAA AEG) during an airplane assessment.
Obligated by the DPA, Boeing must pay a penalty of over $2.5 billion. This includes a criminal monetary penalty ($243.6 million), compensation payments to customers ($1.77 billion), and the establishment of a $500 million crash-victim beneficiaries fund for the legal beneficiaries of the 346 passengers who lost their lives in the Boeing 737 MAX crashes of Lion Air Flight 610 in October 2018 and Ethiopian Airlines Flight 302 in March 2019.
In 2016, two Boeing 737 MAX Pilots found out about an important change to the Maneuvering Characteristics Augmentation System (MCAS). The MCAS affected the flight control system of the airplane. However, Boeing, through these pilots, concealed this change from the FAA AEG and misled the FAA AEG about MCAS. As a result, airplane manuals and pilot-training materials for US-based airlines lacked crucial information about the MCAS.
As part of the DPA, Boeing will continue to cooperate in all investigations. Boeing must report any incident or evidence of violation of US fraud laws committed by its employees or agents. Moreover, Boeing must strengthen its compliance program and meet enhanced compliance program reporting requirements. These requirements include holding quarterly meetings with the Fraud Section and to annually submitting reports about remediation and compliance efforts.
The department’s decision came after a thorough evaluation of the nature and seriousness of the offense, Boeing’s failure to timely and voluntarily self‑disclose the offense, its delayed cooperation, and its prior history of safety and quality issues, among other factors.
Source: US Department of Justice