Boeing May Avoid Criminal Charges For Violating Settlement: Federal Monitor To Oversee Safety

Boeing Co BA has reportedly been approved by the U.S. Department of Justice to avoid criminal prosecution for breaching terms of a 2021 settlement linked to issues with its 737 Max 8 model, which led to two fatal plane crashes in 2018 and 2019.

Instead, the Justice Department intends to propose Boeing a deferred prosecution agreement, typically applied to impose monitoring and compliance requirements on businesses accused of financial crimes or corruption, rather than seeking company conviction, The New York Times reported, citing people familiar with the discussions.

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The agreement will require Boeing to appoint a federal monitor to oversee safety enhancements.

In May, federal prosecutors alleged Boeing had breached a prior deferred prosecution agreement by not establishing and sustaining a program to detect and prevent violations of U.S. anti-fraud laws.

The 2021 settlement followed Boeing’s courtroom admission that two of its employees had misled federal air safety regulators regarding a faulty part implicated in two crashes.

Boeing’s breach of the settlement terms enabled the Justice Department to consider criminal charges. However, following internal deliberations, officials have decided that prosecuting Boeing carried too much legal risk, The New York Times added.

Instead, appointing an independent monitor was seen a faster, more effective method to enforce safety and quality improvements in the troubled company’s manufacturing procedures.

The government anticipated presenting its settlement proposal to Boeing by the month’s end, though the specifics of the terms remain subject to potential modifications, the report read.

Choosing not to prosecute Boeing for violating the 2021 settlement is expected to upset the families of the Max 8 crash victims.

During the recent Senate hearing on Boeing’s handling of safety and quality issues, family members criticized CEO Dave Calhoun.

Senators grilled Calhoun about concerns, including falsified inspections of crucial aircraft components and allegations of retaliation against whistleblowers, The New York Times added.

BA Price Action: BA shares are trading up by 0.15% at $176.60 at last check Friday.

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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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