DOJ to charge Boeing with fraud after breaching a signed agreement in 2021

The U.S. Department of Justice(DOJ) will charge Boeing with fraud, offering the aircraft maker the option to accept a plea deal or face trial. The offer has sparked criticism for being considered a "sweetheart" deal to Boeing.

At a meeting Sunday, officials from the DOJ's fraud section and the U.S. Attorney's Office for the Northern District of Texas met with the families of the victims of two fatal 737 MAX jetliner crashes to discuss the potential consequences Boeing will face for having violated the terms of a deferred prosecution agreement signed in 2021, which allowed the company to avoid a criminal trial by meeting specific conditions.

According to a report by Bloomberg, during this meeting, officials explained that they will give Boeing until the end of next week to decide whether to plead guilty to charges stemming from the crashes that killed 346 people or face trial. The deal would include a fine, a three-year probation period and supervision by a corporate monitor.

A "favorable" plea agreement for Boeing.

Lawyers representing the families of the crash victims expressed their displeasure with the plea agreement proposed by the Department of Justice, describing it as a "sweetheart deal" for Boeing.

Paul Cassell, an attorney for 15 victims' families, criticized the deal by stating, "The memory of 346 innocents killed by Boeing demands more justice than this." Cassell warned that the victims' families "will strenuously object to this plea deal."

Sanjiv Singh, who represents 16 families affected by the crashes, also expressed concern and called the settlement "a sweetheart deal" for Boeing rather than a fair measure for the victims.

Erin Applebaum, another attorney representing the families, called the proposal "shameful" and argued that the settlement "completely fails to mention or recognize the dignity" of the deceased and their loved ones.

Accidents and non-compliance with the 2021 agreement

In October 2018 and then in March 2019, two fatal accidents occurred of Lion Air Flight 610 and Ethiopian Airlines Flight 302 that exposed defects in the 737 MAX flight control software.

These accidents led the DOJ to negotiate a deferred prosecution agreement with Boeing in 2021. This agreement allowed the company to avoid criminal charges in exchange for a fine of approximately $2.5 billion and a commitment to improve its corporate compliance program and increase transparency with regulators.

However, the DOJ re-examined Boeing's situation earlier this year following a new incident in January. That month, a 737 MAX 9 aircraft operated by Alaska Airlines had to make an emergency landing due to an exploding door mid-flight. This event revealed severe flaws in the aircraft's manufacturing and quality controls, which had previously been overlooked.

The incident, coupled with mounting public pressure and heightened scrutiny of Boeing, led the DOJ to conclude that the company had failed to comply with the conditions stipulated in the 2021 agreement. As a result, the DOJ is considering filing new charges against Boeing or entering into a new deal with the company.