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The Boeing Company has entered into a deferred prosecution agreement with the Department of Justice and agreed to pay $2.5 billion to resolve a criminal charge related to a conspiracy to defraud the Federal Aviation Administration’s Aircraft Evaluation Group in connection with the FAA AEG’s evaluation of Boeing’s 737 MAX airplane. The financial settlement is comprised of 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 346 passengers who died in the Boeing 737 MAX crashes of Lion Air Flight 610 and Ethiopian Airlines Flight 302.

In court documents, Boeing admitted that it deceived FAA AEG about a critical aircraft system connected to the flight controls of the Boeing 737 MAX. Because of this deception, a key document published by the FAA AEG lacked information about the part, and in turn, airplane manuals and pilot-training materials for U.S.-based airlines lacked the same information. Two deadly crashes involving the Boeing 737 MAX were attributed in part to the activation of this flight control system during flight. During the crash investigations, FAA AEG learned about changes to the system that impacted flight operations and that Boeing had known about and withheld this information.

In agreeing to the DPA, DOJ noted that Boeing had cooperated with the investigation, but that its disclosures and cooperation was significantly delayed. DOJ also took into account Boeing’s previous history of safety and quality issues. Because the concealment of the critical parts information seemed to be attributable to specific individuals, DOJ concluded that the misconduct was not pervasive across the corporation and decided against requiring an independent compliance monitor.

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