Boeing charged by DOJ with 'conspiracy to defraud the US' over 737 MAX
The company is entering into a $2.5 billion deferred prosecution agreement.
The U.S. Justice Department charged The Boeing Company with "conspiracy to defraud the United States" -- concluding after a lengthy investigation that the company knowingly misled regulators while seeking approval for its 737 MAX aircraft.
Boeing is now entering into a "deferred prosecution agreement" worth $2.5 billion consisting of a $243 million criminal penalty, $500 million to relatives who lost loved ones and $1.77 billion to global airlines affected by the MAX groundings.
In October 2019 pilots struggled to regain control of the MAX and it plunged into the Java Sea off the coast of Indonesia. Five months later another MAX crashed near Addis Ababa airport in Ethiopia just six minutes after takeoff, killing all on board, and forcing regulators around the globe to ground the plane. Three hundred and forty-six people perished in both accidents.
In an SEC filing released Thursday, Boeing said it agreed to the charge "based on the conduct of two former 737 MAX program technical pilots."
"I firmly believe that entering into this resolution is the right thing for us to do—a step that appropriately acknowledges how we fell short of our values and expectations," David Calhoun, Boeing president and CEO, said in a note to employees. "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."
Investigators found that both crashes were tied to the Maneuvering Characteristics Augmentation System, or MCAS, software, which had been designed to help stabilize the jet after heavier, repositioned engines placed on the aircraft caused the plane's nose to point too far upward in certain circumstances.
In both crashes, incorrect data from a faulty sensor caused the MCAS to misfire, forcing the planes to nose down repeatedly. MCAS was not mentioned in the pilot manual -- allowing pilots to enter the MAX cockpit without simulator training that would have cost the airlines more money.
Boeing has been accused of withholding information from the Federal Aviation Administration regarding MCAS. In internal messages that surfaced in October 2019, the chief technical pilot for the aircraft, Mark Forkner, told another pilot that the MCAS flight control system was "running rampant" in a simulator session.
The documents released by the House Transportation and Infrastructure Committee show Forkner told FAA officials that MCAS was safe despite calling it "egregious" based on simulator tests, according to internal messages and emails.
"I basically lied to the regulators (unknowingly)," Forkner said to his colleague in the messages.
Forkner was the main point of contact between the administration and Boeing in regard to areas like pilot training and manual recommendations, an FAA official explained at the time.
Forkner was reportedly questioned by federal prosecutors.
Boeing said in a statement in October 2019 that Forkner's comments "reflected a reaction to a simulator program that was not functioning properly, and that was still undergoing testing."
In January 2020, Boeing released more than 100 pages of internal communications that the company itself called "completely unacceptable."
In one exchange, an unnamed Boeing employee says the 737 Max "is designed by clowns, who in turn are supervised by monkeys," after complaining about the flight management computer.
In another 2018 message a Boeing employee asks, "Would you put your family on a MAX simulator trained aircraft?"
"I wouldn't," he said.
"No," the colleague responded.
Boeing has since rewritten the MCAS software, receiving the FAA's approval for the jet to reenter commercial service on Nov. 18, 2020.
Last week, American flew the first Boeing 737 MAX with paying passengers in almost two years. United Airlines said it will start flying the MAX out of its Denver and Houston hubs on Feb 11. Southwest Airlines estimated that the MAX will return to service no sooner than March.
American, Southwest and United have all said they will be completely transparent with customers who are scheduled to fly on a MAX and will allow them to rebook with no change fee or request a refund if they do not feel comfortable.
But for the family members who lost loved ones the changes Boeing made are not enough to convince them the plane is safe.
"I wish that the Boeing executives would have been there to have experienced watching coffins being lined up and wondering who your loved one is," Zipporah Kuria, who lost her father Joseph Waithaka in the Ethiopia crash, told ABC News. "Having those coffins opened up and being traumatized by what we saw, what was left of our loved ones, and then maybe they would be forward thinking maybe if they walked a mile in our shoes as the people who have had to pay for their negligence. They would think twice before going ahead and putting this aircraft back up."
When asked for comment, the FAA deferred to the Justice Department.
ABC News' Sam Sweeney contributed to this report
ABC News Live
24/7 coverage of breaking news and live events