Prosecutors recommend DOJ file criminal charges against Boeing

WASHINGTON >> U.S. prosecutors are recommending that senior Justice Department officials bring criminal charges against Boeing after finding that the plane maker violated a settlement related to two fatal crashes, two people familiar with the matter told Reuters.

The Justice Department must decide by July 7 whether to prosecute Boeing. The recommendation from prosecutors handling the case has not previously been reported. In May, officials determined the company had 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 plane.

Under the 2021 deal, the Justice Department agreed not to prosecute Boeing over allegations that it defrauded the Federal Aviation Administration as long as the company scrutinized its compliance practices and filed regular reports. Boeing also agreed to pay $2.5 billion to settle the investigation.

Boeing declined to comment. It has previously said it has “honored the terms” of the 2021 settlement, which was for three years and known as a deferred prosecution agreement. Boeing has told the Justice Department it disagrees with its finding that the company violated the settlement, Reuters reported this month.

A Justice Department spokesperson declined to comment.

The two sides are in discussions about a possible resolution to the Justice Department investigation and there is no guarantee that officials will move forward with the charges, the two sources said. The Justice Ministry’s internal deliberations are still ongoing and no final decisions have been made, she added. Criminal charges would deepen an unfolding crisis at Boeing, which has faced intense scrutiny from U.S. prosecutors, regulators and lawmakers after a panel blew up one of its Alaska Airlines planes mid-flight on Jan. 5, just two days before the 2021 settlement expired. .

The sources did not specify what criminal charges Justice Department officials are considering, but one of the people said they could go beyond the original 2021 fraud and conspiracy indictment.

Alternatively, instead of prosecuting Boeing, the DOJ could extend the 2021 settlement for another year or propose new, stricter terms, the sources said.

In addition to financial penalties, the most severe settlements typically involve using a third party to monitor a company’s compliance. The DOJ can also require the company to admit its wrongdoing by pleading guilty.

Boeing may be willing to pay a fine and agree to a monitor but believes a guilty plea, which typically carries additional business restrictions, could be too damaging, one of the sources said. Boeing earns significant revenue from contracts with the U.S. government, including the Defense Department, that could be jeopardized by a felony conviction, one of the sources said.

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

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

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

Additional reporting by David Shepardson in Washington.