Boeing reportedly offered plea deal in criminal fraud case over 737 MAX crashes

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The US Department of Justice (DOJ) will criminally charge Boeing with fraud over two fatal crashes and ask the plane maker to plead guilty or face a trial, two people familiar with the matter have told Reuters.

The DOJ decided to charge Boeing after finding it violated a 2021 agreement that had shielded it from prosecution over fatal crashes involving 737 MAX jets.

The deadly crashes took place in 2018 and 2019, killing 346 people.

The plea deal

The DOJ plans to formally offer a plea agreement to Boeing that includes a financial penalty and imposition of an independent monitor to audit the company’s safety and compliance practices for three years, the sources say.

The proposal would reportedly require Boeing to plead guilty to conspiring to defraud the US Federal Aviation Administration in connection with the fatal crashes.

The proposed agreement also includes a $US487.2 million ($730.6 million) financial penalty, only half of which Boeing would be required to pay, sources add.

That is because prosecutors are giving the company credit for a payment it made as part of the previous settlement related to the fatal crashes of the Lion Air and Ethiopian Airlines flights.

The penalty is the maximum legally allowed for the charge.

Boeing could also likely be forced to pay restitution under the proposal’s terms, the amount of which will be at a judge’s discretion, the sources say.

The offer also contemplates subjecting Boeing to three years of probation and independent safety audits.

The plea deal would also require Boeing’s board to meet with victims’ relatives.

Officials reportedly plan to give Boeing until the end of the week to respond to the offer, which they will present as non-negotiable.

The decision to criminally charge Boeing deepens an ongoing crisis engulfing the plane maker, exposing the company to additional financial ramifications and tougher government oversight.

A guilty plea could also carry implications for Boeing’s ability to enter into government contracts, such as those with the US military, that make up a significant portion of its revenue.

Companies with felony convictions can receive waivers, and it remains unclear to what extent the DOJ’s proposed plea deal addresses the issue.

Should Boeing refuse to plead guilty, prosecutors may take the company to trial.

Families fight ‘negligible’ consequences

DOJ officials revealed their decision to victims’ family members during a call before announcing the plan to Boeing, sources say.

Erin Applebaum, one of the lawyers representing victims’ relatives, said family members wanted the company to face additional charges and stiffer financial consequences.

She called the proposed plea agreement’s financial penalty “negligible” and said victims’ families would oppose the deal in court.

It is unusual for the DOJ to inform other interested parties of its plans before notifying the company in its crosshairs.

But the department has sought to change its tack after facing backlash from the victims’ families concerning a 2021 agreement that shielded Boeing from prosecution over the 2018 and 2019 fatal crashes.

Boeing previously paid $US2.5 billion ($3.75 billion) as part of a deal with prosecutors that granted the company immunity from criminal prosecution over a fraud conspiracy charge related to the 737 MAX’s flawed design.

Victims’ relatives found out about the 2021 deal only after it had been negotiated.

Boeing had to abide by the terms of the deferred prosecution agreement for a three-year period that ended on January 7.

Prosecutors would then have been poised to ask a judge to dismiss the fraud conspiracy charge.

But in May, the DOJ found Boeing breached the agreement, exposing the company to prosecution.

Boeing has previously said it “honoured the terms” of the settlement and formally told prosecutors it disagrees with the finding that it violated the agreement.

A panel blew off a new Boeing 737 MAX 9 jet during a January 5 Alaska Airlines flight, just two days before the 2021 deferred prosecution agreement with the DOJ expired.

US politicians in June grilled Boeing chief executive Dave Calhoun over Boeing’s tarnished safety record.

Lawyers for victims’ family members have cited criticism from Capitol Hill when pressing the Department to prosecute the plane maker and impose a fine of up to $US24.78 billion ($37.16 billion).

Boeing and the DOJ declined to comment on the reports.

This article was originally sourced from www.ABCNews.ca