“The misleading statements, half-truths and omissions communicated to the FAA by Boeing employees hampered the government’s ability to ensure the safety of the flying public,” said US Attorney Erin Nealy Cox for the Northern District of Texas. . “This case sends a clear message: the Justice Department will hold manufacturers like Boeing responsible for defrauding regulators – especially in industries where stakes are so high.”
According to the government’s indictment against the company, at least two unidentified Boeing employees were involved in the fraud from late 2016, in the final stages of the jet’s approval, to late 2018, when the aircraft was already in service and after the first crash had occurred.
According to the filing, at least one of the two employees left Boeing in July 2018 to work for an airline. The employment status of the other employee in the application was not specified. Boeing has agreed to cooperate with any individual prosecutions arising from this case.
The settlement includes a criminal fine of $ 243.6 million, compensation payments of $ 1.77 billion to customers of Boeing’s airline, and an additional $ 500 million to a fund to compensate family members of accident victims. Boeing had previously set aside money to pay airlines and $ 100 million for victims’ families. It said it will charge an additional charge of $ 743.6 million in revenue as a result of the settlement.
Under the deal, the Justice Department would postpone any criminal charges against Boeing for three years and the charges will be dismissed if it no longer sees any more crimes committed by the company.
“I firmly believe that entering into this resolution is the right thing to do – a step that properly recognizes that we have not met our values and expectations,” said Dave Calhoun, CEO of Boeing. “This resolution is a serious reminder to all of us the importance of our obligation of transparency to regulators, and the consequences our business could have if one of us fails to meet those expectations.”
But several family members of the crash victims attacked the settlement as a “blow to the wrist.”
“This is a Boeing protection deal,” said Michael Stumo, father of Samya Rose Stumo, who died in the second crash in March 2019. He said the families of the crash victims had urged the Justince Department not to settle. with Boeing. . The Boeing individuals who committed fraudulent acts will not be held accountable. The government continues to protect them despite acknowledging their criminal acts. The settlement dollar amounts are just rounding errors in Boeing’s corporate finances. This is a false one. justice that insiders have agreed to while excluding victims. “families.”
“May this serve as a reminder that the current Boeing and FAA leaders are not fit to entrust a human life,” said Zipporah Kuria, a UK resident who lost her father in the second crash. “Their priority is business over human life.” She said the settlement “doesn’t even scratch the surface of justice.”
Lost revenues from canceled, delayed or renegotiated sales could cost tens of billions more, according to experts. That could make the 737 Max’s debacle one of the most expensive business mistakes of all time, in terms of both financial costs and lives lost.