The Justice Department has accused Boeing of breaching a settlement that was intended to shield the company from criminal prosecution following two fatal crashes involving its 737 Max aircraft. The department communicated this to a federal judge on Tuesday, adding a new twist to the ongoing saga surrounding the beleaguered aircraft manufacturer.
The crashes, which occurred in 2018 in Indonesia and 2019 in Ethiopia, claimed the lives of 346 people. In January 2021, Boeing reached a $2.5 billion settlement with the Justice Department to avoid prosecution on a single charge of fraud — misleading federal regulators who approved the plane. The company attributed the deception to two relatively low-ranking employees.
However, Glenn Leon, head of the Justice Department's criminal division’s fraud section, stated in a letter filed in a Texas federal court on Tuesday that Boeing failed to implement promised changes to detect and prevent violations of federal anti-fraud laws, thereby violating the terms of the settlement.
This determination implies 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 settlement, the Justice Department said. The department is yet to decide whether to proceed with charges against Boeing, with a decision expected no later than July 7.
Boeing, based in Arlington, Virginia, has disputed the Justice Department's findings. A spokesperson for the company stated, “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.”
The company has been under renewed scrutiny since an incident in January involving an Alaska Airlines flight, where a door plug blew out of a 737 Max, leaving a gaping hole in the side of the jetliner. The FBI has informed passengers from the flight that they might be victims of a crime, and the company is under multiple investigations concerning the incident and its manufacturing quality.
The Justice Department's settlement with Boeing in 2021 followed secret negotiations and included a $243.6 million fine, a $500 million fund for victim compensation, and nearly $1.8 billion to airlines whose Max jets were grounded for almost two years.
Paul Cassell, a lawyer representing families of passengers who died in the second crash, described the Justice Department's determination that Boeing breached the settlement terms as “a positive first step, and for the families, a long time coming.” He added, “But we need to see further action from DOJ to hold Boeing accountable.”
Investigations into the crashes pointed to a flight-control system that Boeing added to the Max without informing pilots or airlines. Boeing downplayed the significance of the system, and did not overhaul it until after the second crash. Since the crashes in Indonesia and Ethiopia, Boeing has faced civil lawsuits, congressional investigations, and significant damage to its business.
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