Boeing faces criminal prosecution in violated settlement over 737 Max

The Department of Justice said Tuesday that Boeing was in violation of a 2021 settlement related to problems with the company’s 737 Max model that led to two deadly plane crashes in 2018 and 2019.

In a letter to a federal judge, the department said that Boeing had failed to “design, implement and enforce” an ethics program to prevent and detect violations of U.S. fraud laws in the company’s operations. Creating that program was a condition of Boeing’s settlement, which also carried a $2.5 billion penalty.

The determination by the Justice Department opens the door to a potential prosecution of a 2021 criminal charge accusing Boeing of conspiracy to defraud the Federal Aviation Administration, though Boeing can contest Tuesday’s decision.

In a statement, Boeing said the company believed it had honored the terms of the settlement, adding it was looking forward to the opportunity to respond.

“As we do so, we will engage with the department with the utmost transparency, as we have throughout the entire term of the agreement,” Boeing said in its statement.

The Justice Department declined to comment. Paul Cassell, a lawyer representing families of victims of the fatal plane crashes, said his clients were planning to meet with the government on May 31 to discuss next steps in the case.

When the government reached its settlement with Boeing in January 2021, many families of the crash victims said the Trump administration had been too lenient on the aircraft manufacturer.

“This is a positive first step and, for the families, a long time coming,” Cassell said. “But we need to see further action from DOJ to hold Boeing accountable.”

The crashes of the 737 Max 8 planes in Indonesia and Ethiopia killed 346 people, prompting the FAA to ground the entire 737 Max fleet. An investigation found both crashes involved mistaken triggering of a maneuvering system designed to help avert stalls in flight.

In another settlement, the Securities and Exchange Commission said Boeing had offered misleading reassurances about the safety of the 737 Max in public statements after both crashes, despite knowing the maneuvering system had posed a continuing safety issue.

The Justice Department reached its finding at a tumultuous time for Boeing, which has faced intense regulatory scrutiny since a door panel blew out of a 737 Max 9 plane during an Alaska Airlines flight from Portland, Oregon, in January. In March, the company said its CEO, Dave Calhoun, would step down at the end of the year, along with Stan Deal, the head of the division that makes planes for airlines and other commercial customers.

Calhoun replaced Dennis Muilenburg, who led the company during the 2018 and 2019 crashes. Boeing fired Muilenburg, whose performance during the crisis angered lawmakers and alienated victims’ families.

This article originally appeared in The New York Times.