Federal prosecutors reportedly have recommended to top Department of Justice officials that airplane manufacturer Boeing face criminal charges.

The company allegedly violated a settlement related to two fatal crashes of the 737 Max plane.

While the recommendation is not a final decision, the Justice Department has until July 7th to determine if it will criminally prosecute the manufacturer.

“The Justice Department earlier this year found Boeing had violated the deferred prosecution agreement and indicated in court filings it might proceed with charges against the company for conduct tied to two deadly 737 Max crashes in 2018 and 2019 and beyond,” CBS News stated.

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Per CBS News:

The agreement stated Boeing would pay a $2.5 billion settlement and make certain organizational changes in exchange for the Justice Department dropping a fraud conspiracy charge after a period of three years. That three-year period would have ended in July, at which point the Justice Department would have closed the case against Boeing if it was determined the company had upheld its end of the agreement.

But in May, federal prosecutors wrote that Boeing “breached its obligations” and allegedly 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.”

Boeing responded in June, telling the Department of Justice it had followed the terms of the deal and disagreed it had violated the agreement.

While the agreement came about following the two 737 Max crashes, which killed a total of 346 people, Boeing has encountered other issues with its planes since then. In January of this year, the cabin door of an Alaska Airlines plane blew off mid-flight. In March, a person familiar with the matter confirmed to CBS News that prosecutors were looking into whether the blowout might affect the deferred prosecution agreement.

Reuters reports:

The sources did not specify what criminal charges Justice Department officials are considering, but one of the people said they could extend beyond the original 2021 fraud conspiracy charge.

Alternatively, instead of prosecuting Boeing, the DOJ could extend the 2021 settlement by a year or propose new, stricter terms, the sources said.

In addition to financial penalties, the strictest settlements typically involve installing a third party to monitor a company’s compliance. The DOJ can also require the company to admit its wrongdoing by pleading guilty.

Boeing may be willing to pay a penalty and agree to a monitor, but believes a guilty plea, which typically incurs additional business restrictions, could be too damaging, said one of the sources. Boeing derives significant revenue from contracts with the U.S. government, including the Defense Department, which could be jeopardized by a felony conviction, one of the sources said.

Relatives of the victims of the two fatal 737 MAX crashes have long criticized the 2021 agreement, arguing that Justice Department officials should have prosecuted the company and its executives.

At a Senate hearing in June, Chief Executive Dave Calhoun acknowledged the company’s shortcomings on safety and apologized to the families who lost loved ones.

Last week, the families pressed prosecutors to seek a fine against the planemaker of nearly $25 billion and move forward with a criminal prosecution.

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