DOJ says Boeing broke deal that avoided prosecution after 2 fatal 737 Max crashes

WASHINGTON — Boeing has violated the terms of a deal to avoid prosecution after the fatal crashes of two 737 Max planes more than five years ago, the U.S. Justice Department told a federal judge on Tuesday.

That means the troubled plane maker could be subject to criminal prosecution for defrauding federal regulators, though Justice Department lawyers stopped short of saying whether they will pursue that remedy.

“The Government has determined that Boeing breached its obligations” under the agreement it reached with the Justice Department in early 2021, “by failing to design, implement, and enforce a compliance and ethics program to prevent and detect violations of the U.S. fraud laws,” prosecutors wrote in a letter to Federal District Judge Reed O’Connor in Texas.

The two-page letter does not mention Alaska Airlines Flight 1282, when a door-plug panel blew off a 737 Max jet in midair in January. But that incident has sparked renewed scrutiny of Boeing’s operations by federal regulators, as well as the Justice Department, which has opened a separate investigation.

Boeing says it disagrees with the DOJ’s conclusion that it has violated the deal.

“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,” spokeswoman Jessica Kowal said in a statement.

Boeing agreed to the deferred prosecution deal with the DOJ in January 2021 and paid $2.5 billion in fines. The plane maker had been accused of misleading regulators who approved the 737 Max.

The Max crashes — one in Indonesia in 2018 and another in Ethiopia in 2019 — killed a total of 346 people. The accidents were blamed, in part, on a new automated flight control system. That system, called MCAS, powerfully pushed the noses of those jets down repeatedly not long after takeoff, killing all on board.

The DOJ agreement essentially placed Boeing under probation for three years — a term that ended just days after the midair blowout on Jan. 5, 2024.

Family members of the crash victims have long criticized the prosecution agreement with Boeing as a sweetheart deal for the company, and have been waging a years-long legal battle to overturn it.

Their lawyers welcomed the DOJ’s announcement, and urged prosecutors to go further.

“This is an important first step toward holding Boeing accountable for the deaths of the 346 passengers and crew on the two flights,” said Paul Cassell, a former federal judge and law professor at the University of Utah who is representing the families.

“But the Justice Department needs to now follow through with effective, transparent, and vigorous prosecution of the conspiracy charge it has filed,” Cassell said.

“We hope that DOJ will continue to pursue justice for Boeing’s victims, and move forward with a prosecution against Boeing for its egregious criminal acts that resulted in the deaths of 346 innocent people,” said Erin Applebaum, a lawyer at the firm Kreindler & Kreindler who represents victims’ families.

The Justice Department could also seek to essentially extend Boeing’s probation under the prosecution agreement.

Prosecutors told the judge they are still determining how to proceed. Under the terms of the agreement, Boeing has a chance to reply to the Justice Department. The DOJ has also scheduled another meeting to seek input from family members of the victims on May 31st in Washington.