Boeing Airplane

Boeing Set To Pay $2.5 Billion In Settlements Over 737 Max Fraud

Boeing will pay more than $2.5 billion to settle criminal charges that the company repeatedly lied about the 737 Max’s engineering problems which eventually led to two catastrophic crashes that killed hundreds of individuals; both crashes had no survivors. 

The company admitted to one count of conspiracy to defraud the United States, and beyond the settlements the company will face no further charges from the US Department of Justice. Acting Assistant Attorney General David Burns of the Justice Department’s Criminal Division recently released a statement regarding the charges. 

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“Boeing’s employees chose a path of profit over candor by concealing material information from the FAA concerning the operation of its 737 Max airplane and engaging in an effort to cover up the deception.” 

Boeing is the nation’s second-largest defense contractor, and is now set to pay the Department of Justice a criminal penalty of $246.6 million. “The families and legal beneficiaries of the 346 passenger victims who died in the Lion Air Flight 610 in Indonesia in October 2018 and the Ethiopian Airlines Flight 302 in Ethiopia five months later will be paid from a fund of $500 million,” according to Burns. 

If split evenly that would equate to around $1.4 million for each family. A majority of the settlement will be given to airline companies that had purchased the faulty 737 Max aircraft and were forced to ground all of the planes following the two crashes. According to the Department of Justice all of the airlines impacted will receive $1.77 billion in compensations for their financial losses. 

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“The tragic crashes of Lion Air Flight 610 and Ethiopian Airlines Flight 302 exposed fraudulent and deceptive conduct by employees of one of the world’s leading commercial airplane manufacturers.” 

Both crashes were caused by changes in the airplane’s Maneuvering Characteristics Augmentation System which forced the nose of 737 Max to tilt towards the ground, leaving the pilots completely powerless in preventing a fatal crash landing. 

Boeing President and Chief Executive Officer, David Calhoun, recently sent out a note to his employees throughout the nation, explaining that he “firmly believes that entering into this resolution is the right thing to do for Boeing, and is a step that appropriately acknowledges how the company fell short of its values and expectations.” 

“This resolution is a serious reminder to all of us of how critical our obligation of transparency to regulators is, and the consequences that our company can face if any one of us falls short of those expectations,” Calhoun continued. Internal Boeing documents revealed that engineers of the 737 Max aircraft notified the company of the Augmentation System’s “egregious problems” as early as 2016, so many are upset with the settlement announcement, claiming the company should be much more severely punished for such a careless mistake that claimed so many innocent lives.

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