Boeing criminal plea deal should be accepted, US DOJ says

By David Shepardson and Jasper Ward

(Reuters) -A plea deal struck with Boeing (NYSE:BA ) over a criminal charge related to software tied to two fatal 737 MAX crashes should be accepted, the U.S. Justice Department said on Wednesday, after some relatives of the 346 people killed in two crashes called for it to be rejected.

Last month, the planemaker finalized an agreement to plead guilty to a criminal fraud conspiracy charge and pay at least $243.6 million after breaching a 2021 deferred prosecution agreement. The government said the planemaker knowingly made false representations to the Federal Aviation Administration about key software for the 737 MAX.

The Justice Department said in a court filing on Wednesday the deal "is a strong and significant resolution that holds Boeing accountable and serves the public interest."

It requires Boeing to "accept the statutory maximum fine of $487.2 million, on top of the billions the company has already paid" in connection with the 2021 deferred prosecution agreement and prior or ongoing civil lawsuits, the Justice Department said.

The department rejected the victims' families' contention that Boeing should face much higher fines after the crashes in Indonesia in 2018 and Ethiopia in 2019 killed their relatives.

"The government cannot prove beyond a reasonable doubt that Boeing's fraud directly and proximately caused the 737 MAX plane crashes," the Justice Department said, adding it could not prove beyond a reasonable doubt that the loss or gain from Boeing's fraudulent activity exceeded $243.6 million.

Paul Cassell, a lawyer for some of the families, said in a court filing last month the fine of up to $487 million "is inadequate -- or, at the very least, rests on misleading accounting and inaccurate accounting."

Boeing did not immediately respond to a request for comment.

The Justice Department has a separate ongoing criminal investigation into the Jan. 5 Alaska Airlines 737 MAX 9 in-flight door plug emergency and it noted the plea deal "does not provide immunity for any other misconduct, including the Alaska Airlines" incident.



The plea deal agreed last month requires Boeing to spend $455 million to strengthen its compliance, safety and quality programs over three years of court-supervised probation and that "will directly benefit the public by reducing the risk of the recurrence of Boeing's fraudulent misconduct," the department said. Boeing will also face oversight from an independent monitor, it noted.

U.S. District Judge Reed O'Connor can also decide to require Boeing to pay restitution, which could include compensation to victims' families beyond what many have already received in settlements or as part of $500 million for relatives under the 2021 agreement.

Source: Investing.com