US wants Boeing to plead guilty to fraud, lawyers say

The U.S. Justice Department is pressuring Boeing to plead guilty to criminal fraud in connection with two fatal plane crashes involving its 737 Max jetliners, according to several people who heard federal prosecutors detail a proposed deal Sunday. .

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

The case stems from the Justice Department’s decision that Boeing violated an agreement that sought to resolve a 2021 indictment that it conspired 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 the fraud on two relatively low-level employees.

The Justice Department informed the families of some of the 346 people who died in the 2018 and 2019 crashes of the plea offer in a video meeting. Family members, who want Boeing to face justice and pay a $24.8 billion fine, reacted angrily. One said prosecutors were manipulating the families; another yelled at them for several minutes when he gave them a chance to speak.

“We are angry. 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 another way to let Boeing get away with it. »

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

Boeing and the Justice Department declined to comment.

The plea deal would strip U.S. District Judge Reed O'Connor of the ability to increase Boeing's sentence if convicted, and some families plan to ask the Texas judge to reject the deal if Boeing accepts it .

The underlying scandalous aspect of the deal is that it fails to acknowledge that Boeing's crime killed 346 people, said Paul Cassell, one of the lawyers for the victims' families. Boeing is not going to be held responsible for this, and they are not going to admit that this happened.

Sanjiv Singh, the lawyer for 16 families who lost loved ones in the Lion Air crash off Indonesia in October 2018, called the plea offer extremely disappointing. The conditions, he said, seem to me like a romantic agreement.

Another lawyer representing the 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 refused the plea deal. He wouldn't commit one way or another, Lindquist said.

The meeting with families of crash victims came weeks after prosecutors told O'Connor that the U.S. aerospace giant had violated the January 2021 agreement that shielded Boeing from criminal prosecution in connection with accidents. The second took place in Ethiopia less than five months after that in Indonesia.

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

However, federal agencies can grant waivers to companies convicted of crimes to keep them eligible for government contracts. Lawyers for the families of the crash victims expect that will be done for 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 sanction as part of the new plea offer, said a person familiar with the matter who spoke on the condition of anonymity to discuss a pending case.

The deal would include a monitor to oversee Boeing, but the company would propose three candidates and ask the Justice Department to choose one, or ask Boeing for additional names. That provision was particularly disliked by family members on the call, participants said.

The Justice Department also gave no indication of whether it will pursue charges against current or former Boeing executives, another long-sought demand from the families.

Lindquist, a former prosecutor, said officials made clear in an earlier meeting that individuals, even CEOs, can be more sympathetic defendants than corporations. Officials cited the 2022 acquittal of Boeing's chief technical pilot for the Max on fraud charges as an example.

It's unclear what impact a plea deal could have on other investigations into Boeing, including those that followed the shattering of a panel called a door plug on the side of a Boeing Max 9 during a Alaska Airlines flight in January.

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