Boeing violated an agreement that allowed it to avoid criminal charges following two fatal 737 MAX crashes, U.S. Justice Department attorneys announced Tuesday as they moved to revive a prosecution paused three years ago.

That prosecution has been on hold since 2021, when Boeing and federal prosecutors struck a contentious agreement that required the airplane manufacturer to meet certain conditions related to safety for three years. Had Boeing been found to have complied with the agreement, it would have avoided the possibility of a criminal conviction in the two MAX crashes that killed more than 300 people.

The deferred prosecution agreement expired in January, days after a panel blew off an Alaska Airlines Boeing 737 MAX airliner, reigniting scrutiny of whether Boeing changed its culture, quality assurance and compliance programs as required following the fatal crashes in 2018 and 2019.

On Tuesday, the Justice Department announced it determined Boeing had not complied with the terms of the agreement, opening the door for federal prosecutors to once again pursue criminal claims against the company.

As DOJ weighs reviving Boeing prosecution, MAX crash families ‘disheartened’

Paul Cassell, an attorney who is representing 15 of the families who lost loved ones in the MAX crashes, said the Justice Department’s decision was “a positive first step, and for the families, a long time coming.”

Boeing disputed the Justice Department’s findings following their release on Tuesday.

“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,” a Boeing spokesperson said in a statement. “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.”

After the fatal crashes in 2018 and 2019, federal prosecutors charged Boeing with one criminal count of fraud, alleging the company failed to disclose information to Federal Aviation Administration regulators about a new software system in the MAX planes. An error with that system, the Maneuvering Characteristics Augmentation System, or MCAS, caused two planes to nosedive shortly after takeoff, killing 346 people.

In the 2021 deferred prosecution agreement, Boeing agreed to pay $2.5 billion, as well as to review and update its policies around safety and compliance with federal regulators. It agreed to set up an ethics and compliance program meant to prevent any violations of U.S. fraud law and to provide consistent reports to the Justice Department about its progress.

For the victims’ families, the agreement was always seen as a sweetheart deal that let Boeing off the hook. The Justice Department’s Tuesday decision is a “frameshift in the DOJ’s approach to prosecution of Boeing,” said Sanjiv Singh, an attorney who is representing 16 families who lost loved ones from the first 737 MAX crash, which occurred Oct. 29, 2018, in Indonesia.

The agreement was “flawed from the beginning and victims’ rights were violated when it was signed,” Singh said. “Boeing should be held accountable in criminal proceedings where the victims have a voice.”

On Tuesday, federal prosecutors said Boeing 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,” according to a letter sent to the families who lost loved ones in the crashes and shared with The Seattle Times.

“For failing to fulfill completely the terms of and obligations under the DPA, Boeing is subject to prosecution by the United States for any federal criminal violation of which the United States has knowledge,” the letter continued.

It specified several conditions that Boeing had agreed to but failed to meet, all centered on the company reviewing and strengthening its program for compliance with U.S. fraud laws.

Among those conditions, the Justice Department said Boeing failed to:

  • Review its existing internal policies for compliance, particularly focused on the company’s interactions with government agencies, including the FAA;
  • Make modifications or adopt a new compliance program, if necessary;
  • Develop compliance policies based on a periodic risk assessment of the company;
  • And, continue to review its compliance policies every year.

Federal prosecutors also found that Boeing failed to “create a culture of ethics and compliance in its day-to-day operations.” The agreement specified that Boeing’s directors and senior managers must offer strong, explicit support for compliance with U.S. fraud laws, and that middle managers should reinforce those standards. It said Boeing must tell all employees that “compliance … is the duty of individuals at all levels.” 

The letter also pointed to a paragraph in the agreement where Boeing agreed that its anti-fraud policies would also apply to “outside parties acting on behalf of the Company, including, but not limited to, agents, consultants, and joint venture partners.”

More on Alaska Airlines and the Boeing 737 MAX 9

Boeing has until June 13 to respond to the Justice Department and “explain the nature and circumstances” of the violation as well as actions Boeing “has taken to address and remediate the situation.”

But, Mark Lindquist, another attorney representing some of the victims’ families, said Tuesday he thinks it is extraordinarily unlikely Boeing’s response will change the Justice Department’s determination.

“The deal is dead. It’s off. Now they go forward with prosecution,” Lindquist said.

Federal prosecutors have until July 7, six months after the deferred prosecution agreement’s expiration, to determine if Boeing breached additional terms of the agreement, according to the letter shared with victims’ families. The Justice Department can also continue to investigate “potential misconduct” by Boeing during that time.

In July, Boeing and the Justice Department will appear before a federal district judge in Texas, where the deferred prosecution agreement was signed. There, Judge Reed O’Connor will decide if he agrees with the Justice Department’s determination that Boeing has violated the agreement.

In a letter to the judge Tuesday, federal prosecutors said DOJ is “determining how it will proceed in this matter.”

The Justice Department is set to meet with the families of those who died in the crash on May 31 to discuss its decision and “potential next steps.”

Cassell, the attorney representing the victims’ families, said he’d still like to see “further action” to hold Boeing accountable. He plans to use the upcoming meeting with federal prosecutors to “explain in more details what we believe would be a satisfactory remedy to Boeing’s ongoing criminal conduct.”