Is accepting a deferred prosecution agreement an admission of guilt?

Question

In a January 7, 2021 press release, "Boeing Charged with 737 Max Fraud Conspiracy and Agrees to Pay over $2.5 Billion," the U.S. Department of Justice says,

The Boeing Company (Boeing) has entered into an agreement with the Department of Justice to resolve a criminal charge related to a conspiracy to defraud the Federal Aviation Administration’s Aircraft Evaluation Group (FAA AEG) in connection with the FAA AEG’s evaluation of Boeing’s 737 MAX airplane.

Boeing, a U.S.-based multinational corporation that designs, manufactures, and sells commercial airplanes to airlines worldwide, entered into a deferred prosecution agreement (DPA) in connection with a criminal information filed today in the Northern District of Texas. The criminal information charges the company with one count of conspiracy to defraud the United States. Under the terms of the DPA, Boeing will pay a total criminal monetary amount of over $2.5 billion, composed of a criminal monetary penalty of $243.6 million, compensation payments of [etc., making up the total].

...

“Today's deferred prosecution agreement holds Boeing and its employees accountable for their lack of candor with the FAA regarding MCAS,” said Special Agent in Charge Emmerson Buie Jr. of the FBI’s Chicago Field Office.

Does this constitute an admission of guilt on the part of Boeing? Can we actually say that they are "guilty of fraud"? Or is there something more subtle going on here?

If it is not an admission of guilt, but is not treated as complete innocence (outside the whatever the DFA requires), what difference could this make to anything else the company does or gets involved in (such as, e.g., other lawsuits)?

Answer 1

Most DPA agreements require the company to accept that all the facts the government alleges are true. This one is no exception. Here's what it says:

The Company admits, accepts, and acknowledges that it is responsible under United States law for the acts of its officers, directors, employees, and agents as charged in the Information, and as set forth in the Statement of Facts, and that the allegations described in the Information and the facts described in the Statement of Facts are true and accurate. The Company agrees that, effective as of the date it signs this Agreement, in any prosecution that is deferred by this Agreement, it will not dispute the Statement of Facts set forth in this Agreement, and, in any such prosecution, the Statement of Facts shall be admissible as: (a) substantive evidence offered by the government in its case-in-chief and rebuttal case; (b) impeachment evidence offered by the government on cross-examination; and (c) evidence at any sentencing hearing or other hearing. In addition, in connection therewith, the Company agrees not to assert any claim under the United States Constitution, Rule 410 of the Federal Rules of Evidence, Rule 11(f) of the Federal Rules of Criminal Procedure, Section 1B1.1(a) of the United States Sentencing Guidelines (“USSG” or “Sentencing Guidelines”), or any other federal rule that the Statement of Facts should be suppressed or is otherwise inadmissible as evidence in any form.

In theory, however, Boeing has not accepted that this set of facts actually constitutes a crime. But this is from that statement:

From at least in or around November 2016 through at least in or around December 2018, in the Northern District of Texas and elsewhere, the Defendant, THE BOEING COMPANY, knowingly and willfully, and with the intent to defraud, conspired and agreed together with others to defraud the United States by impairing, obstructing, defeating, and interfering with, by dishonest means, the lawful function of a United States government agency, to wit, the Federal Aviation Administration Aircraft Evaluation Group (“FAA AEG”) within the United States Department of Transportation, in connection with the FAA AEG’s evaluation of the Boeing 737 MAX airplane’s Maneuvering Characteristics Augmentation System (“MCAS”), including for purposes of the 737 MAX Flight Standardization Board Report (“FSB Report”) and the 737 MAX differences-training determination.

It's entirely fair to characterize the combination of those two things as an admission of guilt. Should Boeing violate the terms of the DPA, the government would have a very easy time proving fraud because of the admissions Boeing made and the defenses Boeing waived. The government wouldn't have entered into the DPA if they didn't believe they were sufficient.

Answer 2

Entering into a deferred prosecution agreement is not (formally) an admission of guilt, nor does it result in a finding of guilt.

It is instead more like pretrial probation. The defendant agrees to abide by certain terms, and the government agrees not to prosecute the case at all, unless the defendant violates the terms.

Answer 3

Background info. Feel free to skip.

It's for those who are browsing by this Q&A and not fully versed in the situation.

Boeing is a going concern company that wants to keep making airplanes. They need this problem behind them, and they need their reputation to take the least damage.

The FBI/DoJ and FAA's motivation is to hit Boeing hard enough to deter companies from deceiving regulators in the future. $2.5 thousand will not suffice; $2.5 billion will suffice. Getting a guilty verdict isn't really their point, and they would actually prefer not to spend the considerable resources to get to one.

The practice of law is compromise. So this brings us to the deferred prosecution.

• (B) Boeing does NOT admit guilt, to answer your question.

• (J) Boeing agrees to hand over a pile of money.

• (J) Boeing agrees to abstain from a list of already-illegal acts, which they are accused of having done, but are not admitting to having done. Your linked press release inserts some unproven opinion there; remember the DoJ is a partisan party here, not the neutral court.

• (B) DoJ suspends the criminal charges contingent on Boeing not breaking the above promise.

• (J) Which gives DoJ extra leverage over Boeing to force them to "do the right thing".

• (B) Boeing wraps up lawsuits with airline customers.

• (B) Boeing wraps lawsuits with crash victims. (some people are not happy; too bad.)

• (B) Since this short-circuits most trials, there will not be months of media spectacle a-la Depp/Heard and many documents will not be entering public court record.

Much like a plea bargain, it's a quid pro quo. I marked (B) for points which benefit Boeing and (J) for things which benefit justice, or the Department of Justice (DoJ), depending on how you look at it. The DoJ contains the FBI.

If you want a look at how a Board of Directors got to that number, feel free to hit "view previous edits". The OP didn't think it helped, so I removed it.

Now let's look at OP's questions.

Does this constitute an admission of guilt on the part of Boeing? Can we actually say that they are "guilty of fraud"? Or is there something more subtle going on here?

Much maneuvering was done to avoid admitting guilt. You can call them "guilty of fraud" and -- let me come back to that one.

If it is not an admission of guilt, but is not treated as complete innocence (outside the whatever the DFA requires), what difference could this make to anything else the company does or gets involved in (such as, e.g., other lawsuits)?

By representing victim interests and setting up a trust fund, this agreement short-circuits most possible lawsuits on this issue. That pleases shareholders and accountants by removing uncertainty. But it also keeps a lot of documents out of court records and avoids public spectacle.

And you could subpoena those documents and create public spectacle, if they sued you for defamation! Which would be their only recourse if you said they were guilty of fraud, to come back to that.

As far as lawsuits for unrelated things, certainly the episode with the 737 Max MCAS system can be trotted out in other lawsuits to make some point or another.