WASHINGTON — Boeing has violated a settlement that allowed the company to avoid criminal prosecution after two deadly crashes involving its 737 Max aircraft, the Justice Department told a federal judge on Tuesday.
It is now up to the Justice Department to decide whether to file charges against the aircraft maker amid increasing scrutiny over the safety of its planes. Prosecutors will tell the court no later than July 7 how they plan to proceed, the Justice Department said.
Boeing reached a $2.5 billion settlement with the Justice Department in January 2021 to avoid prosecution on a single charge of fraud – misleading regulators who approved the 737 Max. Boeing blamed the deception on two relatively low-level employees.
The manufacturing giant came under renewed scrutiny since a door-plug panel blew off a 737 Max jetliner during an Alaska Airlines flight in January. The company is under multiple investigations, and the FBI has told passengers from the flight that they might be victims of a crime.
"We believe that we have honored the terms of that agreement, and look forward to the opportunity to respond to the Department on this issue," Boeing said in a statement. "As we do so, we will engage with the Department with the utmost transparency, as we have throughout the entire term of the agreement, including in response to their questions following the Alaska Airlines 1282 accident.”
Glenn Leon, head of the Justice Department criminal division's fraud section, said in the letter filed in Texas federal court that Boeing failed to make changes to prevent it from violating federal anti-fraud laws — a condition of the the 2021 settlement.
The determination means that Boeing could be prosecuted “for any federal criminal violation of which the United States has knowledge,” including the charge of fraud that the company hoped to avoid with the $2.5 billion settlement, the Justice Department said.
However, it is not clear whether the government will prosecute the manufacturing giant.
“The Government is determining how it will proceed in this matter,” the Justice Department said in the court filing. Prosecutors said they will meet with families of the crash victims on May 31.
Paul Cassell, a lawyer who represents families of passengers who died in the Max crash in Ethiopia, called it a “positive first step, and for the families, a long time coming.”
“But we need to see further action from DOJ to hold Boeing accountable, and plan to use our meeting on May 31 to explain in more details what we believe would be a satisfactory remedy to Boeing’s ongoing criminal conduct,” Cassell said.
Investigations into the 2018 and 2019 crashes pointed to a flight-control system that Boeing added to the Max without telling pilots or airlines. Boeing downplayed the significance of the system, then didn’t overhaul it until after the second crash.
The Justice Department investigated Boeing and settled the case in January 2021. After secret negotiations, the government agreed not to prosecute Boeing on a charge of defrauding the United States by deceiving regulators who approved the plane.
In exchange, the company paid $2.5 billion — a $243.6 million fine, a $500 million fund for victim compensation, and nearly $1.8 billion to airlines whose Max jets were grounded.
Boeing has faced civil lawsuits, congressional investigations and massive damage to its business since the crashes in Indonesia and Ethiopia.
