US prosecutors recommend Boeing be criminally charged after violating fatal crash regulations

On June 24, 2024By Rgal Nv

U.S. prosecutors are recommending to top Justice Department officials that criminal charges be filed against Boeing after finding the aircraft maker violated an agreement relating to two fatal crashes, according to two people familiar with the matter.

The Justice Department must decide by July 7 whether to sue Boeing.

The recommendation of prosecutors in the case has not been previously reported.

In May, officials determined the company violated a 2021 agreement that had shielded Boeing from a criminal charge of conspiracy to commit fraud stemming from two fatal crashes in 2018 and 2019 involving the 737 MAX jet.

As part of the 2021 settlement, the Justice Department agreed not to prosecute Boeing over allegations that it defrauded the Federal Aviation Administration, provided the company reviews its compliance practices and submits reports regular.

Boeing also agreed to pay $2.5 billion ($3.8 billion) to settle the investigation.

Boeing declined to comment.

He previously said he had “honored the terms” of the 2021 settlement, which lasted three years and is known as a deferred prosecution agreement.

Boeing told the Justice Department it disagreed with its determination that the company violated the agreement, Reuters reported this month.

A Justice Department spokesperson declined to comment.

The two sides are in discussions about a possible resolution of the Justice Department investigation and there is no guarantee that those responsible will bring charges, both sources said.

Internal deliberations at the Justice Department continue and no final decision has been made, they added.

Dave Calhoun and Chief Engineer Howard McKenzie testify before a Senate Homeland Security and Governmental Affairs Committee Investigations Subcommittee hearing. (Reuters: Kevin Lamarque)

Criminal charges would deepen the ongoing crisis at Boeing, which has faced intense scrutiny from U.S. prosecutors, regulators and politicians after a panel blew up one of its planes operated by Alaska Airlines in mid-flight on January 5, just two days before the 2021 regulations expire.

The sources did not specify what criminal charges Justice Department officials were considering, but one said they could extend beyond the initial 2021 fraud conspiracy charge .

Alternatively, instead of pursuing Boeing, the DOJ could extend the 2021 settlement for another year or propose new, more stringent conditions, the sources said.

In addition to financial penalties, the strictest regulations typically involve the use of a third party to monitor a company’s compliance.

The DOJ may also require the company to admit wrongdoing by pleading guilty.

Boeing might be willing to pay a fine and accept monitoring, but believes a guilty plea, which typically carries additional trade restrictions, could be too damaging, one of the sources said.

Boeing earns significant revenue from its contracts with the U.S. government, including the Defense Department, which could be at risk if convicted of a crime, one of the sources said.

Relatives of victims of the two fatal 737 MAX crashes have long criticized the 2021 settlement, arguing that Justice Department officials should have pursued the company and its executives.

At a Senate hearing in June, Chief Executive Officer Dave Calhoun acknowledged the company’s safety shortcomings and apologized to families who lost loved ones.

Last week, the families pressed prosecutors to seek a nearly $25 billion fine against the aircraft maker and pursue criminal charges.

Reuters