According to two people familiar with the situation, the US Justice Department will charge Boeing with fraud for two fatal crashes on Sunday. The planemaker must enter a guilty plea or face a trial.
Later in the day, the sources said, the Justice Department planned to offer Boeing a plea deal. The deal included a monetary fine and the appointment of an impartial monitor to oversee the company’s safety and compliance procedures for three years.
According to the sources, Justice Department officials will provide Boeing until the end of the week to react to the offer, which they will declare to be non-negotiable. Prosecutors indicated they would try Boeing if the firm refused to enter a guilty plea.
The Justice Department and Boeing declined to comment. The Justice Department’s decision to pursue Boeing and request a guilty plea was originally reported by Reuters.
The Justice Department discovered that Boeing had broken a 2021 agreement protecting it from prosecution for the deadly 737 MAX crashes. As a result, they decided to pursue the company. 346 individuals were killed in the deadly crashes that happened in 2018 and 2019.
Pursuing criminal charges against Boeing intensifies the current crisis enveloping the aircraft manufacturer. Moreover, it subjects Boeing to more financial consequences and stricter government regulation.
A guilty plea might impact Boeing’s ability to secure government contracts. These contracts, such as those with the US military, account for a sizable portion of its revenue. Waivers for businesses with felony convictions are available. However, it’s unclear how much the Justice Department’s suggested plea agreement would address the problem.
Earlier on Sunday, family relatives of the victims were informed by Justice Department representatives of their decision over the phone. According to the sources, the plan involves forcing Boeing to enter a guilty plea to charges of conspiracy. These charges are related to deceiving the US Federal Aviation Administration in connection with the deadly disasters.
The Justice Department is driving for Boeing to enter a guilty plea. This comes after another in-flight accident in January revealed ongoing safety and quality problems at the aircraft manufacturer.
On January 5, a panel on a brand-new Boeing 737 MAX 9 jet blew off during an Alaska Airlines flight. This incident occurred just two days before the expiration of the Justice Department’s 2021 deferred prosecution agreement.
Because of the arrangement, Boeing was not prosecuted in relation to the deadly crashes in 2018 and 2019. Boeing has already told prosecutors that it “honored the terms” of the settlement and that it disagrees with the conclusion that it broke the contract.
They said that only half of the $487.2 million financial penalty included in the proposed deal would have to be paid by Boeing. The corporation received credit from the prosecution because it had already made a payment as part of an earlier settlement related to the fatal crashes of Ethiopian Airlines and Lion Air planes. The highest amount that can be charged under the law is the penalty.
According to the sources, Boeing may also be required to provide reparations, the precise amount of which will be left up to the judge. According to them, the offer also considers putting Boeing through a three-year probationary period.
They added that the plea agreement would necessitate a meeting between the victims’ families and Boeing’s board.
During the call, Erin Applebaum, one of the attorneys assisting the victims’ relatives, stated that the relatives were upset with Justice Department representatives. They felt that Boeing was not being held responsible for the deadly crashes, despite the planned plea agreement. According to her, family members wanted the business to be hit with more accusations and harsher financial penalties.
“The 737 MAX families vigorously oppose the shameful new sweetheart deal between Boeing and the Department of Justice,” said Applebaum. She called the proposed plea agreement’s financial penalty “negligible” and said victims’ families will oppose the deal in court.
Regarding the families’ response, the Justice Department declined to comment.
According to a third source, it is unusual for the Justice Department to reveal its intentions to other interested parties before alerting the targeted corporation. However, the Justice Department—headed by Attorney General Merrick Garland—has attempted to reorient itself in response to criticism from the relatives of the victims regarding the initial 2021 deal. The 2021 agreement was only disclosed to the victims’ family after it had been arranged.
Congressmen from the United States questioned Boeing CEO Dave Calhoun in June about the company’s dismal safety record. Attorneys for the relatives of the victims have urged the Justice Department to bring charges against the planemaker. They seek a punishment of up to $24.78 billion, citing criticism from Capitol Hill.
Boeing previously agreed to pay $2.5 billion to authorities. In exchange for this payment, they received immunity from prosecution on a fraud conspiracy allegation pertaining to the 737 MAX’s defective design.
For a duration of three years, ending on January 7, Boeing was required to comply with the conditions of the deferred prosecution agreement. At that point, prosecutors would have been prepared to request that the judge drop the fraud conspiracy allegation. However, the Justice Department discovered in May that Boeing had broken the contract, opening the door to legal action.
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