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EXCLUSIVE-Feinberg to oversee $500 million Boeing 737 MAX victim fund

(Adds confirmation by Feinberg spokeswoman, background, Boeing and Justice Department declining to comment)

WASHINGTON, March 10 (Reuters) - Prominent attorneys Kenneth Feinberg and Camille Biros will be named to oversee a $500 million victim compensation fund for the relatives of 346 people killed in two fatal Boeing 737 MAX crashes, a spokeswoman for Feinberg confirmed on Wednesday.

As part of a settlement with the Justice Department, Boeing Co in January agreed to pay $500 million to compensate the heirs, relatives and beneficiaries of the passengers who died in Lion Air Flight 610 and Ethiopian Airlines Flight 302 in 2018 and 2019.

Wednesday marks the second anniversary of the Ethiopian crash that led to the MAX’s 20-month grounding worldwide, which was lifted in November.

Boeing and the Justice Department declined to comment.

The $500 million was part of a $2.5 billion deferred prosecution agreement Boeing reached with federal prosecutors in January over the MAX.

Boeing was required to propose three candidates for the position and the Justice Department had the right to choose the administrator from among the candidates proposed.

The settlement, which allowed Boeing to avoid prosecution, also includes a fine of $243.6 million and compensation to airlines of $1.77 billion over fraud conspiracy charges related to the plane’s flawed design.

The Justice Department said in January, “Boeing’s employees chose the path of profit over candor by concealing material information from the FAA concerning the operation of its 737 Max airplane and engaging in an effort to cover up their deception.”

Under the terms of the settlement, the $500 million fund does not impact ongoing litigation against Boeing by relatives. Feinberg will make recommendations about payments but the Justice Department will make final decisions on all payments.

In July 2019, Boeing named Feinberg to oversee the distribution of $50 million to the families of those killed in the crashes.

Feinberg and Biros have administered many compensation funds including for victims of the Sept. 11, 2001, attacks on the United States, the 2010 Deepwater Horizon oil spill, General Motors Co ignition switch crashes and numerous school shootings. (Reporting by David Shepardson in Washington and Tracy Rucinski in Chicago Editing by Chris Reese and Matthew Lewis)

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