Boeing charged with conspiracy to defraud U.S., must pay $2.5 billion

Boeing charged with conspiracy to defraud U.S.

WASHINGTON, D.C. - The U.S. Department of Justice has charged Boeing with "conspiracy to defraud the United States" over the investigations into two deadly 737 MAX Jet crashes.

Boeing has agreed to pay $2.5 billion in penalties and compensation to resolve the criminal charges, according to a news release.

The Department of Justice accused Boeing employees of purposely misleading the FAA with "half-truths" and "ommissions" while the federal agency investigated the two crashes.

"Boeing’s employees chose the 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 their deception," Acting Assistant Attorney General David P. Burns said in a prepared statement.

As part of the agreement, Boeing will pay the following:

$243.6 million in criminal fines
$1.77 billion in compensation to Boeing 737 MAX airline customers
$500 million to establish a crash victim beneficiaries fund to compensate relatives of those who died.

Boeing 737 MAX Jets have been grounded since March 2019 following the two deadly crashes.

On Oct. 29, 2018, Lion Air Flight 610 crashed shortly after takeoff into the Java Sea near Indonesia. All 189 passengers and crew on board died.

On March 10, 2019, Ethiopian Airlines Flight 302, a Boeing 737 MAX, crashed shortly after takeoff near Ejere, Ethiopia. All 157 passengers and crew on board died.

It was discovered after both crashes that Boeing failed to adequately train pilots on a part of the aircraft called the Maneuvering Characteristics Augmentation System (MCAS) that impacted the flight control system.

Investigators found that the MCAS would jam into a nose-dive and pilots were not trained on taking back control. This caused both of the crashes, investigators found.

Boeing did not immediately release a statement in response to the charges.