US wants Boeing to plead guilty to fraud in fatal crashes, lawyers say | Aviation

The U.S. Justice Department is pushing Boeing to plead guilty to criminal fraud in connection with two deadly plane crashes involving its 737 Max jets, according to several people who heard federal prosecutors detail a proposed bid on Sunday.

Boeing will have until the end of next week to accept or reject the offer, which includes the giant aerospace company agreeing to an independent monitor who will oversee compliance with anti-fraud laws, they said.

The case stems from the department’s determination that Boeing violated an agreement intended to resolve a 2021 conspiracy charge to defraud the U.S. government.

Prosecutors alleged at the time that Boeing misled regulators who approved the 737 Max and established pilot training requirements to fly the plane. The company blamed two relatively low-level employees for the fraud.

The Justice Department informed relatives of some of the 346 people who died in the 2018 and 2019 crashes about the plea offer during a video conference.

Family members, who want Boeing to face a criminal trial and pay a $24.8 billion fine, reacted angrily. One said prosecutors were misleading families; another shouted at them for several minutes when given the chance to speak.

“We are upset. They should just sue,” said Nadia Milleron, a Massachusetts resident whose 24-year-old daughter, Samya Stumo, died in the second of two 737 Max crashes.

“This is just a rehash of how to let Boeing off the hook.”

Prosecutors told the families that if Boeing rejects the plea offer, the Justice Department will seek a trial in the matter, meeting participants said. Justice Department officials presented the offer to Boeing during a meeting on Sunday, according to a person familiar with the situation.

Boeing and the Justice Department declined to comment.

The plea deal would take away U.S. District Judge Reed O’Connor’s ability to increase Boeing’s sentence to a conviction, and some of the families plan to ask the Texas judge to reject the deal if Boeing agrees to it.

“The scandalous part of this settlement is that it does not recognize that Boeing’s crime killed 346 people,” said Paul Cassell, one of the lawyers for the victims’ families. “Boeing will not be held responsible for this and will not admit this happened.”

Sanjiv Singh, a lawyer for 16 families who lost relatives in the October 2018 Lion Air crash in Indonesia, called the offer of an appeal “extremely disappointing.” The terms, he said, “seem to me like a sweetheart deal.”

Another lawyer representing families suing Boeing, Mark Lindquist, said he asked the head of the Justice Department’s fraud section, Glenn Leon, whether the department would add additional charges if Boeing declined the plea deal.

“He wouldn’t commit one way or the other,” Lindquist said.

The meeting with families of crash victims came weeks after prosecutors told O’Connor that the U.S. aerospace giant violated the January 2021 agreement that protected Boeing from criminal prosecution related to the crashes. The second occurred in Ethiopia, less than five months after Indonesia.

A conviction could jeopardize Boeing’s status as a federal contractor, according to some legal experts. The company has major contracts with the Pentagon and NASA.

However, federal agencies can grant exemptions to companies convicted of crimes to keep them eligible for government contracts. Lawyers for the families of the accident victims hope that the same will be done by Boeing.

Boeing paid a $244 million fine as part of the 2021 settlement of the original fraud charge. The Justice Department will likely seek another similar penalty as part of the new plea offer, said a person familiar with the matter who spoke on condition of anonymity.

The deal would include a monitor to oversee Boeing — but the company would put forward three nominees and have the Justice Department choose one, or ask Boeing for additional names. This provision was particularly hated by family members present, participants said.

The Justice Department has also given no indication that it will prosecute any current or former Boeing executives, another demand long sought by families.

Lindquist, a former prosecutor, said authorities made clear during a previous meeting that individuals — even CEOs — can be more sympathetic defendants than companies. Authorities pointed to the 2022 acquittal on fraud charges of Boeing’s chief technical pilot for the Max as an example.

It’s unclear what impact a plea deal might have on other investigations into Boeing, including those following the explosion of a panel called a port plug on the side of a Boeing Max 9 during an Alaska Airlines flight in January.