Boeing charged with fraud over 737 Max, fined more than $2.5 billion

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May 20, 2020
Four Boeing 737 Max planes in the air.

Enlarge / Boeing 737 Max planes. (credit: Boeing)

Misleading federal regulators who were investigating not one but two plane crashes turns out to be a bad idea. On Thursday, the Department of Justice announced that Boeing has been charged with a conspiracy to defraud a government agency that was evaluating the company's 737 Max airplane.

As a result of "misleading statements, half-truths, and omissions communicated by Boeing employees" to the Federal Aviation Authority's Aircraft Evaluation Group, Boeing has agreed to pay more than $2.5 billion as part of a deferred prosecution agreement—that includes a criminal penalty of $243 million, $500 million to compensate the heirs of 346 crash victims, and $1.77 billion in compensation to Boeing's airline customers.

Boeing's problem with its best-selling 737 Max began in October 2018 when Lion Air Flight 610 crashed into the Java Sea and killed 189 people. The following March, Ethiopian Airlines Flight 302 crashed after takeoff in Ethiopia, killing 157 people. Both crashes had the same cause—the plane's Maneuvering Characteristics Augmentation System, or MCAS.

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