DOJ says Boeing faces criminal charge for violating deal over 737 Max crashes

The US Department of Justice yesterday said it has determined that Boeing violated a 2021 agreement spurred by two fatal crashes and is now facing a potential criminal prosecution.

Boeing violated the agreement “by failing to design, implement, and enforce a compliance and ethics program to prevent and detect violations of the US fraud laws throughout its operations,” the DOJ said in a filing in US District Court for the Northern District of Texas. Because of this, “Boeing is subject to prosecution by the United States for any federal criminal violation of which the United States has knowledge,” the DOJ said.

The US government is still determining whether to initiate a prosecution and said it will make a decision by July 7. Under terms of the 2021 agreement, Boeing has 30 days to respond to the government’s notice.

The DOJ court filing did not list any specific incidents. But the notice came after a January 2024 incident in which a 737 Max 9 used by Alaska Airlines had to make an emergency landing because a door plug blew off the aircraft in mid-flight. Boeing also recently said that some workers skipped required tests on the 787 Dreamliner planes but falsely recorded the work as having been completed.

Boeing itself referred to the Alaska Airlines flight in a statement the company provided to Ars today. Boeing confirmed that it received a communication “from the Justice Department, stating that the Department has made a determination that we have not met our obligations under our 2021 deferred prosecution agreement, and requesting the company’s response.”

“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. “As we do so, we will engage with the Department with the utmost transparency, as we have throughout the entire term of the agreement, including in response to their questions following the Alaska Airlines 1282 accident.”

Deal struck after crash deaths of 346 passengers

Yesterday’s DOJ court filing said that Boeing could be prosecuted for the charge listed in the one-count criminal information that was filed at the same time as the deferred prosecution agreement in 2021. That document alleged that Boeing defrauded the Federal Aviation Administration in connection with the agency’s evaluation of the Boeing 737 Max. The DOJ filing yesterday said Boeing could also be prosecuted for other offenses.

In January 2021, the DOJ announced that Boeing signed the deferred prosecution agreement “to resolve a criminal charge related to a conspiracy to defraud the Federal Aviation Administration’s Aircraft Evaluation Group (FAA AEG) in connection with the FAA AEG’s evaluation of Boeing’s 737 Max airplane.”

This occurred after 346 passengers died in two Boeing 737 Max crashes in 2018 and 2019 in Indonesia and Ethiopia. Boeing agreed to pay $2.5 billion, including $1.77 billion in compensation for airline customers and $500 million for the heirs, relatives, and legal beneficiaries of the crash victims.

“The tragic crashes of Lion Air Flight 610 and Ethiopian Airlines Flight 302 exposed fraudulent and deceptive conduct by employees of one of the world’s leading commercial airplane manufacturers,” Acting Assistant Attorney General David Burns said when the 2021 deal was struck. “Boeing’s employees chose the path of profit over candor by concealing material information from the FAA concerning the operation of its 737 Max airplane and engaging in an effort to cover up their deception.”

US Attorney Erin Nealy Cox said then that “misleading statements, half-truths, and omissions communicated by Boeing employees to the FAA impeded the government’s ability to ensure the safety of the flying public.”

The nonprofit Foundation for Aviation Safety, which is led by former Boeing employee Ed Pierson, recently accused Boeing of violating the deferred prosecution agreement. Pierson alleged in a December 2023 court filing that “Boeing has deliberately provided false, incomplete, and misleading information to the FAA, the flying public, airline customers, regulators, and investors.”

Meeting with victims’ families

The DOJ court filing yesterday said the department is continuing to confer with the airlines and family members of the crash victims.

“To that end, the Government separately notified the victims and the airline customers today of the breach determination,” the DOJ wrote. “The Government also has already scheduled a conferral session for May 31, 2024, with the victims. The Government last conferred with the victims on April 24, 2024, to discuss the issue of whether Boeing breached the [deferred prosecution agreement].”

Paul Cassell, an attorney for victims’ families, said the DOJ filing “is a positive first step, and for the families, a long time coming. But we need to see further action from DOJ to hold Boeing accountable and plan to use our meeting on May 31 to explain in more detail what we believe would be a satisfactory remedy to Boeing’s ongoing criminal conduct.”