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Blog » News » Boeing found to have violated $2.5bn settlement agreement

Boeing found to have violated $2.5bn settlement agreement

An airplane sits on the runway on a dusky night

Boeing, the aviation and airplane giant, has been found by the Justice Department to have egregiously violated the terms of a $2.5bn settlement agreement.

After fatal crashes in 2018 and 2019, a settlement exempted the aviation leader from prosecution. The Justice Department told a Texas court that this has now been breached.

Boeing violates agreement

In January 2021, Boeing agreed to a settlement with the Justice Department to avoid prosecution for fraud. The settlement would target two former employees who had the burden of responsibility for approving the 737 Max.

According to a letter submitted to a Texas court, this $2.5 bn settlement has been breached, and there has been increased market and consumer scrutiny of the company after a recent mechanical fault.

Multiple outlets have reported that the breach is due to Boeing “failing to design, implement, and enforce a compliance and ethics program to prevent and detect violations of the U.S. fraud laws throughout its operations.”

If prosecution was to become a reality for the flight giant, then it could face conspiracy to defraud the U.S. justice system.

Boeing CFO Brian West said, “We continue to be fully committed to transparency and accountability with our regulators. The FAA is deeply involved and undertaking a tougher audit than anything we’ve ever been through before. And as they do their important work, we’re undertaking comprehensive actions, so that we can move forward to strengthen quality and build confidence.”

We reported that a faulty door plug resulted in the company shutting down production and reporting a $200m loss in its financial take last year. This, in turn, caused the regulator to ground the airline’s Boeing 737 MAX 9. Thousands of flights were canceled, and United’s production line was stalled while the FAA looked into the harrowing incident.

Boeing has not responded to comments other than those reported by Forbes, with the manufacturer saying that they “honored the terms of the (Justice Department settlement) agreement and looks forward to the opportunity to respond.”

Image: Ideogram.

 

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