Boeing admits to fraud over 737 Max jet crashes and more

Boeing admits to fraud over 737 Max jet crashes

Boeing is poised to plead guilty to fraud over its 737 Max jets, implicated in crashes that killed 346 people in Indonesia and Ethiopia. The aerospace giant opted for a plea deal and a $487.2 million fine to avoid a lengthy trial on the felony criminal charge of conspiracy to defraud the U.S. Prosecutors accused the American aerospace giant of lying to regulators who approved the airplane and the pilot-training requirements to safely fly it.

However, families of crash victims are challenging the agreement, criticizing it as lenient and demanding a trial with substantial penalties and executive accountability. Along with a fine, the deal mandates that Boeing invest $455 million in safety improvements while under probation for three years. The plea’s acceptance hinges on a forthcoming hearing in Texas. (See “Here’s what to know about Boeing agreeing to plead guilty to fraud in 737 Max crashes,” by David Koenig and Alanna Durkin Richer, Associated Press, July 9, 2024.)

U.S. Supreme Court hands down big decisions on bribery and securities

Two rulings from the U.S. Supreme Court in June could have major implications for anti-fraud efforts. In the first case, the U.S.’s highest court ruled in Securities and Exchange Commission [SEC] v. Jarkesy that the SEC’s practice of imposing fines through administrative proceedings, used to penalize securities fraud, violates the Seventh Amendment’s right to a jury trial in common-law suits. The decision limits the SEC’s ability to bring enforcement actions seeking penalties in its own administrative courts, requiring it to bring its actions to federal courts instead. This could affect other federal agencies with similar administrative processes. (See “Justices limit major SEC tool to penalize fraud,” by Ronald Mann, SCOTUSblog, June 28, 2024.)

In the second ruling, the court overturned the bribery conviction of a former Indiana mayor, James Snyder, who was accused of accepting $13,000 from a trucking company in exchange for steering city contracts its way. The majority opinion argued that prosecutors failed to prove a quid pro quo agreement before contracts were awarded, invalidating Snyder’s conviction. The court’s ruling continues a trend of limiting the U.S. government’s use of expansive federal laws to prosecute cases of public corruption. (See “Supreme Court overturns ex-mayor’s bribery conviction, making it harder to prosecute public corruption law,” by Lindsay Whitehurst, Associated Press, June 26, 2024.)

Interpol hits global scam networks where they count

In June, international police organization Interpol coordinated a global initiative aimed at dismantling the financial operations of online scam networks. Operation First Light 2024 spanned 61 countries and froze 6,745 bank accounts, seized assets totaling $257 million and arrested 3,950 suspects involved in phishing, investment fraud, fake online shopping sites, romance and impersonation scams.

Authorities also identified over 14,000 possible suspects globally. The operation intercepted $135 million in fiat currency and $2 million in cryptocurrency and seized assets worth more than $120 million. (See “USD 257 million seized in global police crackdown against online scams,” Interpol, June 27, 2024.)