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Boeing in Hot Water For Violating Deal that Shielded them from Prosecution after 737 Max Crashes, says Justice Department

By July 7, prosecutors will inform the court of their intentions. In January 2021, Boeing settled with the Justice Department for $2.5 billion to avoid prosecution for fraud related to misleading regulators regarding the 737 Max



Boeing has been accused by the Justice Department of breaking the terms of an agreement that spared the company from facing criminal charges following the fatal crashes involving its 737 Max planes. The Justice Department now holds the authority to determine whether to pursue legal action against Boeing amidst growing concerns regarding the safety of its aircraft.


By July 7, prosecutors will inform the court of their intentions. In January 2021, Boeing settled with the Justice Department for $2.5 billion to avoid prosecution for fraud related to misleading regulators regarding the 737 Max. Boeing attributed the wrongdoing to two lower-level employees.


Recent incidents, such as a panel detaching from a 737 Max during a flight by Alaska Airlines, have heightened scrutiny on the aerospace manufacturer. The company faces multiple investigations, with the FBI advising passengers from the affected flight that they may have been involved in a criminal act.


In January 2021, Boeing struck a $2.5 billion deal with the Justice Department to sidestep prosecution for one count of fraud, specifically for misleading regulators involved in approving the 737 Max. Boeing attributed this wrongdoing to two employees of lower rank.


Following an incident in January where a door-plug panel detached from a 737 Max during an Alaska Airlines flight, Boeing faced renewed scrutiny. The company is now the subject of various investigations, with the FBI cautioning passengers from the affected flight that they could have been impacted by a criminal offense.


"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. "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.”


Glenn Leon, who leads the fraud section of the Justice Department's criminal division, stated in a letter submitted to a federal court in Texas that Boeing neglected to implement necessary modifications to prevent future breaches of federal anti-fraud regulations. This failure to enact changes was a stipulation of the settlement reached in 2021.



The resolve means that Boeing could be prosecuted “for any federal criminal violation of which the United States has knowledge,” including the charge of fraud that the business hoped to avoid with the $2.5 billion settlement, the Justice Department said.


“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 details what we believe would be a satisfactory remedy to Boeing’s ongoing criminal conduct,” Cassell said.


However, there's uncertainty regarding whether the government will take legal action against the manufacturing giant. Investigations into the crashes of 2018 and 2019 highlighted Boeing's installation of a flight-control system in the Max without informing pilots or airlines. Initially downplaying the system's importance, Boeing only revamped it after the second crash.


The Justice Department probed Boeing and resolved the matter in January 2021. Through undisclosed discussions, the government opted not to pursue criminal charges against Boeing for defrauding the United States by misleading regulators who green lit the aircraft.


In return, Boeing paid $2.5 billion, comprising a $243.6 million fine, a $500 million compensation fund for victims, and close to $1.8 billion to airlines affected by the grounding of their Max jets.


Boeing has experienced litigation, scrutiny from Congress, and substantial repercussions to its commercial activities as a result of the incidents in Indonesia and Ethiopia.





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