Boeing Pleads Not Guilty In 737 Max Crash Fraud Case

By Brian Bushard 

Boeing pleaded not guilty in an arraignment on Thursday over charges the manufacturer deceived federal authorities over the safety of its 737 MAX jets following two deadly crashes in 2018 and 2019, Bloomberg reported, after a judge ruled the families of the victims have standing to challenge a massive $2.5 billion settlement the company agreed to in 2021.

Representatives from Boeing appeared in a federal court in Fort Worth, Texas, on Thursday over a criminal charge of conspiracy to defraud the Department of Justice over claims it had made that its 737 MAX commercial jets are safe.

It comes just over two years after Boeing made a $2.5 billion plea agreement with the Department of Justice in 2021, admitting to conspiring to defraud the Federal Aviation Administration’s evaluation agency over the safety of its 737 MAX planes, in return for being immunized from prosecution if it met the terms of its deal.

Federal District Court Judge Reed O’Connor ruled last October, however, that the 346 people killed in the two crashes in Indonesia and Ethiopia are crime victims, and that the Department of Justice failed to inform the families about the department’s negotiations with Boeing, violating the federal Crime Victims’ Rights Act.

Lawyers representing the relatives of some of the passengers killed in the two crashes had accused the company of the “deadliest corporate crime in U.S. history,” in a brief filed on Wednesday.

Families of the victims are requesting a monitor chosen by the court to evaluate whether Boeing is making safety improvements in the wake of the crashes and that the company be “prosecuted to the hilt,” families’ attorney Paul G. Cassell said, multiple outlets reported.

KEY BACKGROUND

Boeing launched its 737 MAX commercial jet in 2017, but was forced to ground its fleet worldwide after a deadly crash in Ethiopia in March 2019 killed 157 people on board. That crash came five months after another flight on a Boeing 737 MAX jet left 189 people dead—with both crashes stemming from a failure in the planes’ flight control system, pushing the nose of the plane sharply downwards, according to a technical review. The FAA cleared the 737 MAX jets for flights nearly two years later, in November 2020, deeming the planes safe for passengers.

TANGENT

In addition to the $2.5 billion settlement in 2021, Boeing’s board of directors also agreed to pay the company $237.5 million in a settlement last April to resolve a lawsuit from shareholders—led by New York state Comptroller Thomas DiNapoli and the Police Pension Association of Colorado—alleging Boeing’s board of directors “abdicated their obligation to monitor safety to the extent it was no longer even a topic of discussion in board meetings.” Boeing also agreed to pay $200 million last September to settle charges from the Securities and Exchange Commission that it had allegedly misled investors with “materially misleading public statements” following the two deadly crashes of its 737 MAX airplane, and that it knew the first of the two crashes was at least partly caused by a malfunction of its flight control feature. Boeing had instead told the public the crash was the result of pilot error and insufficient aircraft maintenance, and failed to publicly disclose the results of an internal safety review that found an “airplane safety issue,” according to the SEC.

Source: Forbes