WASHINGTON (Reuters) — Boeing Co. will pay over $2.5 billion to resolve the U.S. Justice Department’s investigation into two deadly 737 MAX crashes that killed 346 people, the Justice Department said, but will not be forced to plead guilty to criminal charges.
The Justice Department said the settlement includes a criminal monetary penalty of $243.6 million, compensation payments to Boeing’s 737 MAX airline customers of $1.77 billion, and the establishment of a $500 million crash-victim beneficiaries fund to compensate the heirs, relatives, and legal beneficiaries of the passengers.
The crashes led to the plane’s grounding for 20 months in March 2019 that was only lifted in November after Boeing made significant safety upgrades.
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Boeing was charged with one count of conspiracy to defraud the United States. The largest U.S. airplane manufacturer faces a three-year deferred prosecution agreement after which the charge will be dismissed if the company complies with the agreement.
“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. “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.”
Boeing admitted in court documents that two of its 737 MAX Flight Technical Pilots deceived the Federal Aviation Administration about a key safety system tied to both fatal crashes called MCAS.
Boeing Chief Executive David Calhoun said in a statement the agreement “appropriately acknowledges how we fell short of our values and expectations.”
The airline payment fund will include prior payments already made by the Boeing to airlines.