US judge sets Boeing 737 MAX fraud trial for June 23

By David Shepardson and Dan Catchpole

WASHINGTON (Reuters) -A U.S. judge on Tuesday abruptly set a June 23 trial date in the Justice Department's criminal fraud case against Boeing stemming from the planemaker's alleged misrepresentations to U.S. regulators about a key system on the 737 MAX.

In July, Boeing agreed to plead guilty to a criminal fraud conspiracy charge after two fatal 737 MAX crashes and to pay a fine of up to $487.2 million. U.S. District Judge Reed O'Connor had previously given Boeing and DOJ until April 11 to come to an agreement on a new plea deal after he rejected the prior deal, faulting a diversity and inclusion provision.

In 2023, O'Connor said in Fort Worth, Texas, "Boeing's crime may properly be considered the deadliest corporate crime in U.S. history."

The Wall Street Journal reported on Monday that Boeing is seeking to withdraw the existing plea deal. O'Connor did not indicate why he was setting a trial date or withdrawing the prior April 11 deadline for the sides to reach a new deal.

Boeing said on Tuesday that the company and the Justice Department "continue to be engaged in good faith discussions regarding an appropriate resolution of this matter."

The Justice Department did not immediately comment.

Boeing's plea deal struck last year included spending $455 million to improve safety and compliance practices over three years of court-supervised probation as well as supervision by an independent monitor for three years.

Relatives of the victims of the two 737 MAX crashes, which occurred in 2018 and 2019 and killed 346 people, have called the plea agreement a "sweetheart" deal that failed to adequately hold Boeing accountable for the deaths of their loved ones.

Erin Applebaum, a lawyer representing 34 families of those killed in the 2019 MAX Ethiopian Airlines crash, urged the Justice Department "to stand on the right side of history, reject any further plea negotiations, and move forward with a full prosecution."

She added: "The families deserve their day in court, and this opportunity for justice must not be squandered."

An accepted plea deal would brand Boeing a convicted felon for conspiring to defraud the Federal Aviation Administration about problematic software affecting the flight control systems in the planes that crashed during the MAX's certification.

In May, the DOJ found Boeing had violated a 2021 agreement that had shielded it from prosecution over the crashes. Prosecutors then decided to criminally charge Boeing and negotiate the current plea deal.

The decision followed a January 5, 2024, in-flight blowout of a door panel on an Alaska Airlines' jet that exposed ongoing safety and quality issues at Boeing.

Trump administration officials have said regulators must be firm with Boeing after a series of missteps.

"We need to be tougher on Boeing. We need to be tougher on the industry," said Steve Bradbury, who was confirmed as deputy transportation secretary this month.

(Reporting by David Shepardson, Chris Prentice and Dan Catchpole)