US prosecutors meeting with Boeing, crash victims as criminal charging decision looms, sources say

By Mike Spector and Chris Prentice

NEW YORK (Reuters) -U.S. prosecutors are meeting with Boeing and fatal-crash victims' relatives as a July 7 deadline looms for the Justice Department to decide whether to criminally charge the planemaker, according to two people familiar with the matter and correspondence reviewed by Reuters.

Justice Department officials met with Boeing lawyers on Thursday to discuss the government’s finding that the company violated a 2021 agreement with the department, one of the sources said. That deal, known as a deferred prosecution agreement (DPA), had shielded it from criminal prosecution over two 737 MAX crashes in 2018 and 2019 that killed 346 people.

Separately, federal prosecutors are slated to meet with victims’ family members on Sunday to update them on the progress of their investigation, according to the second person. U.S. officials are working on a "tight timeline", according to an email sent by the DOJ and reviewed by Reuters.

Boeing’s lawyers from Kirkland & Ellis on Thursday presented their case to officials from the Deputy Attorney General’s office that a prosecution would be unwarranted and that there is no need to tear up the 2021 deal, one of the people said.

Such appeals from companies in the DOJ’s crosshairs are typical when negotiating to resolve a government investigation.

Officials want input from family members as they consider how to proceed, the email said. Prosecutors from the Justice Department’s criminal fraud division and the U.S. attorney’s office in Dallas will attend the Sunday meeting, it said.

Spokespeople for the DOJ and Boeing declined to comment.

Boeing has previously said it has “honored the terms” of the settlement and formally told prosecutors it disagrees with the finding that it violated the agreement.

U.S. prosecutors have recommended to senior Justice Department officials that criminal charges be brought against Boeing after finding the planemaker violated the 2021 settlement, two people familiar with the matter previously told Reuters.

The two sides are in discussions over a potential resolution to the Justice Department's investigation and there is no guarantee officials will move forward with charges, they said last week.

The deliberations follow a Jan. 5 mid-flight panel blow-out on a Boeing plane just two days before the company’s DPA expired. The incident exposed ongoing safety and quality issues at Boeing.

Boeing had been poised to escape prosecution over a criminal charge of conspiracy to defraud the U.S. Federal Aviation Administration (FAA) arising from the 2018-2019 fatal crashes.

Prosecutors had agreed to drop a criminal charge so long as Boeing overhauled its compliance practices and submitted regular reports over a three-year period. Boeing also agreed to pay $2.5 billion to settle the investigation.

In May, officials determined the company breached the agreement, exposing Boeing to prosecution. The DOJ said in a court filing in Texas that the planemaker had 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."

(Reporting by Chris Prentice and Mike Spector in New YorkAdditional reporting by Allison Lampert in Montreat; Editing by Chizu Nomiyama)