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The Street
The Street
Patricia Battle

Boeing sinks deeper into hot water over its 737 Max mishaps

The Boeing situation just got a lot more serious. The U.S. Department of Justice has just notified the plane manufacturer that it is subject to criminal prosecution for violating a 2021 agreement that settled charges it faced for two previous 737 Max crashes that killed 346 people.

In a May 14 letter to U.S. District Judge Reed O’Connor, who oversaw the agreement, the Justice Department states that 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” which was a part of the agreement.

Related: Boeing supplier fights to conceal docs amid second whistleblower death

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

What led to the agreement being established were the deadly crashes of Lion Air Flight 610 in 2018 and Ethiopian Airlines Flight 302 in 2019 that resulted in the Federal Aviation Administration temporarily grounded Boeing’s 737 Max. The company went on to face criminal charges for the deadly crashes as it was accused of misleading the government about the 737 Max’s flight control software. Boeing ended up landing the agreement with federal prosecutors in 2021, which also required the company to pay over $2.5 billion to settle the charges.

United Airlines ground crew load luggage onto a Boeing 737 Max-8 plane at Newark Liberty International Airport (EWR) in Newark, N.J., US, on March 13, 2024. 

Bloomberg/Getty Images

The Justice Department is currently assessing how to proceed in Boeing’s alleged violation of the agreement and is giving the company until June 13 to respond to the letter in writing “to explain the nature and circumstances” of the breach, and the actions it has taken “to address and remediate the situation.”

The move from the Justice Department comes after it launched a criminal investigation into Boeing a few months ago, which began after an Alaska Airlines flight on Jan. 5 was forced to make an emergency landing after a door plug blew off of the Boeing 737 Max 9 aircraft mid-flight. The department was reportedly looking into the incident to see if the company violated the 2021 agreement.

Related: U.S. airlines challenge Biden administration's new transparency rules

Boeing is also currently facing an investigation from the FAA, which is examining Boeing’s safety and quality control practices, as well as a lawsuit from the passengers who were on the Alaska Airlines flight. 

More Boeing:

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