U.S. judge orders Boeing to be arraigned for MAX fraud
By David Shepardson
(Reuters) -Families of victims in fatal crashes in which Boeing Co was involved in were opposed to a plea deal. A federal judge ordered Boeing Co to appear before the court on January 26 for a 2021 felony case.
Boeing received immunity from criminal prosecution under the $2.5B Justice Department deferred prosecutor agreement. The agreement covers a conspiracy charge of 737 MAX fraud related to the plane’s flawed design.
Families argued that the Justice Department “lied to and violated their rights through an obscure process” and asked U.S. District Judge Reed O’Connor for a rescinding of Boeing’s immunity against criminal prosecution.
O’Connor of Fort Worth’s Northern District of Texas ruled in October that the victims of the two Boeing 737 MAX crash deaths are legal “crime victims.” Family members had urged O’Connor to order Boeing to be legally arraigned for the felony charge.
Boeing and the Justice Department did not respond to requests for comment.
O’Connor instructed any lawful representatives of “crime victims”, who wish to appear at the proceedings, to give notice and to “an appropriate person appear on behalf of Boeing.”
Boeing lost more than $20B in crashes in Indonesia in 2019 and Ethiopia in 2018, which led to a 20-month grounded of its best-selling aircraft. The U.S. Congress passed legislation to improve airplane certification.
Boeing and Justice Department both oppose the reopening of the deferred prosecut agreement. This agreement included $500 million in victim compensation, $243.6M in fine, and $1.7 Billion in compensation to airlines.
The Justice Department said in 2021 “misleading statements, half-truths, and omissions communicated by Boeing employees to the (Federal Aviation Administration) impeded the government’s ability to ensure the safety of the flying public.”
In a November court filing, Justice Department stated it didn’t oppose an arraignment Boeing, but opposed undoing it. They said that it “would impose severe hardships on the parties” and the many victims of compensation.
Boeing stated that in November, it would not reopen the agreement. The company called the agreement “unprecedented,” inequitable, and unworkable. Boeing also pointed out that it has been adhering to the agreement for nearly two decades.
Boeing agreed to pay $200 Million to settle civil charges filed by the Securities and Exchange Commission alleging that it misled investors about MAX.
Polish national airline PLLLOT requested O’Connor to declare the airline a crime victim in its MAX criminal case. This would allow it to receive significant compensation.
(Reporting by David Shepardson, Editing by Leslie Adler, Marguerita Choy).