Former Boeing Pilot Acquitted in 737 MAX Criminal Trial
Takeaway: Despite this acquittal, the Department of Justice has demonstrated that it can and will prosecute individuals for corporate malfeasance. A settlement by a corporation does not necessarily protect individual employees from liability.
In a 90-minute verdict handed down Wednesday, March 23, 2022, a Texas federal jury acquitted Boeing’s former chief technical pilot Mark Forkner of four counts of wire fraud. This verdict comes as a disappointment to the Department of Justice (DOJ), which sought – and failed – to hold an individual accountable for the wrongdoings of a corporation.
The Case Against Boeing
Forkner was the former Chief Technical Pilot for Boeing, and was instrumental in an alleged conspiracy to hide information from Federal Aviation Administration (FAA) regulators about additional training required for pilots in a new version of flight controls for the Boeing 737 MAX. Boeing installed a software system in its 737 MAX that contained an additional implement of flight controls called the Maneuvering Characteristics Augmentation System (MCAS), which was not included on previous versions of the airplane. The MCAS, based on readings from a single sensor, would push the nose of the airplane downward and not permit manual overrides by pilots. Forkner’s indictment alleged that in order to save the company money, Forkner withheld crucial safety information about the MCAS. Boeing ultimately hid the existence and operation of this system from pilots and even removed information about it from draft operating manuals. As a result, U.S.-based airline customers lacked critical information in deciding whether to purchase Boeing’s 737 MAX airplanes. Tragically, two of these airplanes crashed within the span of five months in 2018 and 2019, killing 346 people.
Boeing was charged with criminal fraud. In January 2021, Boeing struck a deal with the government – the company entered into a deferred prosecution agreement (DPA), which stipulated that if Boeing meets a series of requirements, the criminal charges against the company will be dropped after three years. Under the terms of this DPA, Boeing was assessed a total monetary penalty of over $2.5 billion, which includes a criminal penalty, compensation payments to airline customers, and a fund to compensate the families and representatives of the crash victims. The DPA also requires Boeing to cooperate with the government by reporting any evidence or allegation of fraud by its employees. Boeing also agreed to an enhanced compliance program, which requires it to meet with the Fraud Section of the DOJ at least quarterly and to submit yearly reports on the status of its remediation and compliance efforts. The DPA not only effectively shields the company from further criminal liability, it also explicitly exonerates senior Boeing management. Read the DOJ’s press release of the deferred prosecution agreement at: https://www.justice.gov/opa/pr/boeing-charged-737-max-fraud-conspiracy-and-agrees-pay-over-25-billion
The Case Against Forkner
Forkner, indicted in October 2021, was the only individual criminally charged in relation to the Boeing 737 MAX scandal. He was accused of deliberately misleading the FAA and two of Boeing’s U.S. airline customers about the certification of the Boeing 737 MAX, and faced a maximum penalty of 20 years on each charge. Forkner was alleged to have known about the MCAS and deliberately concealed this knowledge in an effort to save the company millions of dollars.
Forkner’s indictment was hailed by the DOJ as a deterrent. Assistant Attorney General Kenneth Polite stated, “Regulators like the FAA serve a vital function to ensure the safety of the flying public. To anyone contemplating criminally impeding a regulator’s function, this indictment makes clear that the Justice Department will pursue the facts and hold you accountable.” Read the DOJ’s press release of Forkner’s indictment at: https://www.justice.gov/opa/pr/former-boeing-737-max-chief-technical-pilot-indicted-fraud
Forkner’s rapid not guilty verdict is a rare defeat for the federal government. Under the onerous deferred prosecution agreement, the government is scrutinizing the company’s compliance for three years. The DOJ has been vocal as of late regarding its desire to hold individuals accountable for corporate malfeasance. Time will tell if additional individuals associated with Boeing will be the subject of criminal charges.
Pietragallo Gordon Alfano Bosick & Raspanti, LLP assists corporations and their leadership in enhancing compliance and in responding to government enforcement actions. We assist clients in all 50 states, the District of Columbia, and abroad.