U.S. says Boeing breached 2021 737 MAX criminal prosecution deal

The U.S. Justice Department said late on Tuesday that Boeing had breached its obligations in a 2021 agreement that shielded the planemaker from criminal prosecution over fatal 737 MAX crashes in 2018 and 2019 that killed 346 people.

The Justice Department said in a court filing in Texas that Boeing had failed to "design, implement and enforce a compliance and ethics program to prevent and detect violations of the U.S. fraud laws throughout its operations."

Justice Department officials made the finding in the wake of a separate January in-flight blowout that exposed continuing safety and quality issues at Boeing. A panel blew off a new Boeing 737 MAX 9 jet during a January 5 Alaska Airlines flight, just two days before the 2021 agreement shielding Boeing from prosecution over the previous fatal crashes expired.

The determination exposes Boeing to a potential criminal prosecution over the 2018 and 2019 crashes that could carry steep financial penalties and tougher oversight, deepening a corporate crisis and reputational damage stemming from the January blowout. While Boeing is now subject to prosecution as a result of breaching the 2021 agreement, the Justice Department said in the court filing that officials will consider steps the planemaker has taken to address and remediate violation of the pact before determining how to proceed.

The Justice Department directed Boeing to respond by June 13 and intends to decide whether to prosecute Boeing by July 7, the filing said.

Boeing confirmed it had received word from the Justice Department of its determination that the company breached the 2021 deal, known as a deferred prosecution agreement, or DPA.

"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 in a statement late on Tuesday. "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."

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