Lawyers: US wants Boeing to plead guilty over fatal crashes, is in tricky spot

Jul 1, 2024, 3:10 PM | Updated: 3:17 pm

Photo: An airplane flies over a sign on Boeing's newly expanded 737 delivery center, Oct. 19, 2015,...

An airplane flies over a sign on Boeing's newly expanded 737 delivery center, Oct. 19, 2015, at Boeing Field in Seattle. (File photo: Ted S. Warren, AP)

(File photo: Ted S. Warren, AP)

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 jetliners, according to several people who heard federal prosecutors detail a proposed offer Sunday.

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

The case stems from the department’s determination that Boeing violated an agreement that was intended to resolve a 2021 charge of conspiracy to defraud the U.S. government. Prosecutors alleged at the time that Boeing misled regulators who approved the 737 Max and set pilot-training requirements to fly the plane. The company blamed two relatively low-level employees for the fraud.

The Justice Department told relatives of some of the 346 people who died in the 2018 and 2019 crashes about the plea offer during a video meeting. The family members, who want Boeing to face a criminal trial and to pay a $24.8 billion fine, reacted angrily. One said prosecutors were gaslighting the families; another shouted at them for several minutes when given a chance to speak.

“We are upset. They should just prosecute,” said Massachusetts resident Nadia Milleron, whose 24-year-old daughter, Samya Stumo, died in the second of two 737 Max crashes. “This is just a reworking of letting Boeing off the hook.”

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

Boeing and the Justice Department declined to comment.

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

“The underlying outrageous piece of this deal is that it doesn’t acknowledge that Boeing’s crime killed 346 people,” said Paul Cassell, one of the lawyers for victims’ families. “Boeing is not going to be held accountable for that, and they are not going to admit that that happened.”

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

Another lawyer representing families who are 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 turns down the plea deal. “He wouldn’t commit one way or another,” Lindquist said.

The meeting with crash victims’ families came weeks after prosecutors told O’Connor that the American aerospace giant breached the January 2021 deal that had protected Boeing from criminal prosecution in connection with the crashes. The second one took place in Ethiopia less than five months after the one in Indonesia.

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

However, federal agencies can give waivers to companies that are convicted of felonies to keep them eligible for government contracts. Lawyers for the crash victims’ families expect that would be done for Boeing.

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

“They skated on the felony in 2021 by negotiating deferred prosecution agreement,” Lindquist said to KIRO Newsradio. “This plea deal requires them to take the felony.”

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

It is unclear what impact the deal might have on other investigations into Boeing, including those following the blowout of a panel called a door plug from the side of a Boeing Max 9 during an Alaska Airlines flight in January.

That said, when it comes to Boeing, the DOJ is in a tricky spot.

“The DOJ has to balance accountability and justice with the fact that Boeing is critical to our economy and national security,” Lindquist said to KIRO Newsradio. “The company needs to be held accountable. The DOJ wants to do this in a way that allows the company to survive and rebuild.”

There is a deadline to the offer the DOJ has put forward.

“Boeing has to accept by the end of this week if Boeing declines the offer, the case goes to trial,” Lindquist said to KIRO Newsradio. “That said, I expect Boeing will leap at this deal. A trial would be absolutely brutal for Boeing. The evidence is overwhelming. Boeing executives have made public admissions at trial.”

Editors’ note: This story originally was published Sunday, June 30, 2024. It has been updated and republished multiple times since then.

Contributing: The Associated Press; Heather Bosch, KIRO Newsradio

Heather Bosch is an award-winning anchor and reporter on KIRO Newsradio. You can read more of her stories here. Follow Heather on X, or email her here.

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Lawyers: US wants Boeing to plead guilty over fatal crashes, is in tricky spot