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Boeing has pleaded guilty to conspiring to defraud the government over the fatal crashes involving its 737 Max jets in Indonesia and Ethiopia, which killed 346 people. This comes after the Justice Department found that Boeing violated the terms of a 2021 deal to avoid prosecution.

Prosecutors claim that two Boeing pilots withheld crucial information from the FAA about an automated control system on the Max, implicated in both crashes. Boeing will avoid trial by pleading guilty to a felony count before a Sunday midnight deadline. The Justice Department filed related documents in a federal court in Texas, setting up a hearing for crash victims' families to voice their concerns, and the court will decide whether to accept the plea agreement.

Under a new deal, Boeing agreed to pay $487.2 million in fines and commit at least $455 million to compliance and safety programs. They will also be on supervised probation for three years. An independent monitor will oversee their adherence to these terms. The agreement also mandates a meeting between Boeing’s board of directors and crash victims’ families, fulfilling a long-sought demand by the families.

“This criminal conviction demonstrates the department’s commitment to holding Boeing accountable for its misconduct,” a Justice Department official stated. This guilty plea is rare for a company of Boeing’s stature and highlights the lingering impact of the deadly crashes. In January, Boeing grapples with another safety crisis involving a panel flying off a newer Max model midflight.

In a statement, Boeing confirmed reaching an “agreement in principle” with the Justice Department, pending final approval of specific terms. The court filing did not address potential waivers Boeing may need to seek due to contracting bans triggered by its conviction.

Paul Cassell, attorney for the families, and Erin Applebaum, partner at Kreindler & Kreindler, have voiced strong objections to the plea deal, labeling it insufficient and criticizing the Justice Department for proceeding despite the families' opposition.

The case involved the 737 Max's design and an automated system necessary due to new engines. Prosecutors alleged that Boeing’s pilots misled the FAA about the system, omitting it from a safety report and leading to a lack of pilot training.

In January 2021, Boeing and the Justice Department announced a deferred prosecution agreement, allowing Boeing to avoid criminal prosecution. Boeing admitted that its technical pilots misled regulators and agreed to pay $500 million to the families. However, by May 2023, prosecutors found that Boeing had violated the agreement by failing to implement required compliance and ethics programs.

Crash victims' families, initially excluded from the 2021 agreement, fought for their right to be heard and have since been briefed by prosecutors. John C. Coffee, law professor and director of the Center on Corporate Governance at Columbia Law School, emphasized the importance of an effective federal monitor to ensure Boeing's compliance with the new agreement.

Relatives of crash victims continue to press for stricter measures against Boeing, especially following the January midair blowout incident, which revealed significant shortcomings in Boeing’s manufacturing and quality control systems.

While the Lion Air and Ethiopian Airlines crashes were linked to the Max’s design flaws, the January incident was tied to manufacturing issues at Boeing’s plant in Renton, Washington. The FAA demanded improvements and forbade Boeing from increasing its 737 Max production until the company met regulatory standards.

Boeing has faced government fraud allegations before, settling a space launch contracting corruption case in 2006 for $615 million in penalties. As Boeing seeks to recover from its current crisis, it recently announced a deal to acquire Spirit AeroSystems to gain better control over its supply chain. The responsibility of rebuilding Boeing’s reputation will largely fall to a new CEO, as current CEO Dave Calhoun plans to step down at the end of the year.