FORT WORTH, Texas (CN) — Federal prosecutors told a judge in Texas Tuesday evening that Boeing may be facing criminal charges after violating a $2.5 billion settlement that put on hold charges brought against the company after two crashes of the 737 Max killed 346 people.
The Department of Justice filed a two-page letter, telling U.S. District Judge Reed O’Connor in Fort Worth that Boeing breached multiple paragraphs of a deferred prosecution agreement by “failing to design, implement and enforce a compliance and ethics program to prevent and detect violations of the U.S. fraud laws through its operations.”
The federal conspiracy case against the Virginia-based aerospace manufacturer has been on hold since 2021 after the settlement was reached with the Trump administration. Two of Boeing’s 737 Max pilots were accused of deceiving the Federal Aviation Administration in 2017 about the Maneuvering Characteristics Augmentation System software, which was designed to push the nose of the 737 Max down to prevent stalling. Boeing reportedly added the software due to the 737 Max’s larger, more fuel-efficient LEAP1-B engines requiring higher mounting points on the wing, which changed the center of gravity of the plane.
The FAA grounded the 737 Max on March 13, 2019, after the deadly crashes of Lion Air Flight 610 five months earlier and Ethiopian Airlines Flight 302 three days earlier. The FAA allowed the 737 Max to return to service on Nov. 18, 2020.
Boeing agreed under the settlement to pay a criminal penalty of $243.6 million, $1.77 billion in compensation for airline customers and establish a $500 million crash victim fund.
The deferred prosecution agreement expired in January — within days of a door plug on a Boeing 737 Max 9 blowing out mid-flight on Alaska Airlines Flight 1282. This latest mishap has refocused scrutiny on the troubled 737 Max variant and Boeing’s safety and quality control standards.
Boeing quickly disputed the Justice Department’s determination, stating it will engage federal prosecutors “with the utmost transparency” on the matter, including the government’s inquiries about Alaska Airlines 1282.
“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 written statement Tuesday evening.
The FAA disclosed this month that Boeing voluntarily reported a safety inspection issue with the company’s 787 Dreamliner plane — that inspectors might not have confirmed adequate bonding and grounding where wings join the fuselage. The FAA is investigating claims that workers falsified records to say the inspections were completed.
Federal prosecutors have so far only taken one criminal case regarding the 737 Max to trial, accusing former Boeing chief test pilot Mark Forkner of lying to the FAA and airlines about the MCAS software. A Fort Worth federal jury acquitted Forkner of four counts of wire fraud in 2022 after deliberating for one hour. He faced up to 80 years in federal prison.
The Justice Department told Judge O’Connor that it will inform him of whether it will criminally charge Boeing by July 7 and that it will confer with the families of the victims of Lion Air 610 and Ethiopian Airlines 302 on May 31. Boeing has until June 13 to respond to the breach determination.
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