Justice Department Mulls Deferred Prosecution for Boeing Over Fatal 737 MAX Crashes

The U.S. Justice Department is considering allowing Boeing to avoid criminal prosecution for violating a 2021 settlement related to two fatal 737 MAX crashes. The DOJ may offer a deferred prosecution agreement with a federal monitor overseeing safety improvements. Relatives of crash victims demand stronger penalties.

The U.S. Justice Department is considering allowing planemaker Boeing to escape criminal prosecution for violating the terms of a 2021 settlement related to two fatal 737 MAX crashes in 2018 and 2019, the New York Times reported on Friday.

The department has not made final decisions or ruled out bringing charges, or some other solution, the New York Times said, citing people familiar with the situation. The DOJ is considering offering Boeing a deferred prosecution agreement (DPA), which might require the company to install a federal monitor to oversee safety improvements. Boeing was not immediately available for comment, and a spokesperson for the DOJ declined to comment. Reuters could not independently verify the report.

Boeing shares were flat in afternoon trade. In May, the Justice Department said

Boeing had violated a 2021 agreement with prosecutors that shielded it from criminal prosecution over the fatal crashes. The 2021 DPA required the U.S. planemaker to overhaul its compliance practices. Boeing has said it complied with the agreement.

At that time, the DOJ said Boeing failed to "design, implement, and enforce a compliance and ethics program" to prevent violations of U.S. fraud laws. Boeing in January 2021 reached an agreement with the DOJ to pay $2.5 billion to resolve a criminal investigation into the company's conduct surrounding the fatal crashes. Boeing previously paid $2.5 billion as part of that deal, in which prosecutors agreed not to prosecute the company over a fraud conspiracy charge related to the 737 MAX's flawed design.

If the DOJ chooses, prosecutors could charge the company criminally, a move that could affect Boeing's ability to secure government contracts, according to a Reuters review of prosecutors' actions following findings that companies violated other similar agreements. Any DOJ move to not prosecute Boeing would bring some relief to the beleaguered planemaker, which has been engulfed in a crisis since the blowout of a door plug on a 737 MAX 9 jet on Jan. 5, in which several passengers suffered injuries. Boeing shares have slumped over 30% this year.

Relatives of the victims of the two fatal 737 MAX crashes have long criticized Boeing's deal with prosecutors, contending that Justice Department officials failed to hold the company accountable. This week, they pressed prosecutors to seek a fine against the planemaker of nearly $25 billion and move forward with a criminal prosecution.

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