Boeing Pleads Guilty to Fraud During US Investigation of Deadly 737 Max Crashes

The DOJ and Boeing are finalizing the full plea agreement and plan to file it in federal court in Texas by July 19. A judge must approve the plea deal.

Despite this plea deal, Boeing still faces a criminal probe into the more recent 737 Max Alaska Airlines incident where a door blew out of the jet during a flight.

The Fatal Crashes and the 2021 Non-Prosecution Agreement

On Oct. 29, 2018,a Lion Air 737 Max jet crashed into the Java Sea outside Jakarta, Indonesia, a few minutes after takeoff. Everyone on board died -- 189 passengers and the crew. Another 737 Max crashed minutes after takeoff in March of 2019 in Addis Ababa, Ethiopia, killing 157 people.

A January 2021 DOJ Deferred Prosecution Agreement (DPA) with Boeing permitted the company to avoid criminal prosecution for these crashes so long as it complied with new safety obligations. In May 2024, the DOJ informed the aviation giant that it had failed "to design, implement, and enforce a compliance and ethics program to prevent and detect violations of the U.S. fraud laws throughout its operations."

The DOJ said the fraud violations related to Boeing’s knowingly false representations to the Federal Aviation Administration (FAA) about its new software that required less intensive pilot training and saved money. The software feature was supposed to automatically push the airplane’s nose down in certain conditions. A failure of this feature appeared to cause the two overseas 737 Max crashes.

Boeing became subject to prosecution after this violation.

The Plea Agreement

To avoid prosecution, in the plea deal the company agreed to pay the $436.5 million dollar fine and spend a minimum of $455 million over the next three years to improve safety and compliance programs. An independent monitor will oversee compliance with these terms and file public annual reports on Boeing’s progress. Further, the company will be on probation during the three-year period.

Boeing Board must also meet with the relatives of the victims killed in the 737 Max crashes in Indonesia and Ethiopia.

Importantly, this plea deal solely covers Boeing's conduct before the fatal jet crashes of 2018 and 2019. The agreement does not shield the company from other potential investigations or charges related to the Alaska Airlines door blowout in January 2024 or other conduct.

Plea Upsides for Boeing

The victims’ families are not happy with the plea deal. They wanted Boeing to face a trial to publicly expose its decisions concerning the 737 Max jet, further damaging Boeing’s reputation. The plaintiffs in those cases believe the financial consequences of those trials could have been larger for Boeing.

Erin Applebaum of Kreindler & Kreindler LLP who represents some victim families called the plea deal a “slap on the wrist.” Attorneys for the victims’ relatives plan to urge the judge overseeing the case to reject the plea agreement. In a court filing, the lawyers quoted the judge’s 2023 statement that “[B]oeing's crime may properly be considered the deadliest corporate crime in U.S. history."

Boeing’s motivation for the deal is also related to the company’s pending government review of its proposed Spirit AeroSystems (SAS) acquisition. SAS is a Boeing supplier.

Guilty Plea Fallout for Boeing

Pleading guilty to a federal criminal fraud charge, however, will not be a bed of roses for Boeing. The company is now a felon. Lucrative government contracts with the U.S. Defense Department and NASA could be in jeopardy though Boeing can seek waivers.