Boeing to pay $2.5 billion for 737 Max fraud

Boeing to pay $2.5 billion for 737 Max fraud

Boeing will pay more than $2.5 billion to settle criminal charges of concealing and cheating on the technical condition of 737 Max planes. There will be no other charges against Boeing.

Hiding information about problems with the 737 Max led to two crashes that claimed hundreds of lives. The company accepted one charge of conspiracy to defraud U.S. authorities as part of a plea agreement, so no other charges from the U.S. Department of Justice will be filed “Boeing employees chose the path of profit rather than candor by hiding material information from the federal aviation administration about the 737 Max’s performance. And tried to cover up their deception,” said Acting Assistant Attorney General David Burns.

Boeing, which is the nation’s second-largest defense contractor after Lockheed Martin, will pay a criminal fine of $243.6 million to the Justice Department. The families and legal beneficiaries of the 346 passenger victims who died on Lion Air Flight 610 in Indonesia in October 2018 and Ethiopian Airlines Flight 302 five months later will be paid $500 million. Divided equally, that would amount to just over $1.4 million per family.

The vast majority of the fine will go to the airlines that purchased the faulty 737 Max and were subsequently forced not to use the planes after the crashes. They will collectively receive $1.77 billion in compensation for their financial losses, according to the U.S. Department of Justice.