US to decide by late May if Boeing violated prosecution deal, sources say

By Mike Spector and David Shepardson

NEW YORK/WASHINGTON (Reuters) -U.S. Justice Department officials plan to decide as soon as late May whether Boeing violated an agreement that shielded the planemaker from criminal prosecution over fatal crashes in 2018 and 2019, people familiar with the matter said.

Government officials revealed the timeline during five hours of meetings on Wednesday in which families of the victims of the two Boeing 737 MAX crashes pressed U.S. officials to criminally prosecute the planemaker.

The families have argued that Boeing violated a 2021 deal with prosecutors to overhaul its compliance program following the crashes, which killed 346 people.

Federal prosecutors had agreed to ask a judge to dismiss a criminal charge against Boeing so long as it complied with the deal's terms over a three-year period.

But during a Jan. 5 Alaska Airlines flight, just two days before the 2021 agreement expired, a panel blew off a new Boeing 737 MAX 9 jet.

The agreement gives U.S. officials six months from the deal's Jan. 7 expiration -- or until July 7 -- to decide whether to prosecute Boeing on a charge that the company conspired to defraud the Federal Aviation Administration or pursue other alternatives to dismissing the case. 

Paul Cassell, a lawyer for the families, said on Wednesday that the Justice Department plans to give Boeing and the families at least 30 days notice of its decision ahead of the deadline, which would mean a decision by early June.

"We certainly hope they do the right thing and continue to pursue this case," Cassell said, adding that government lawyers declined to answer specific questions about the review. "If we hear the Justice Department is moving to drop the charges, we will fight that aggressively."

Justice Department officials are now weighing that incident as part of a broader probe into whether Boeing violated the deal, known as a deferred prosecution agreement, or DPA, two people familiar with the matter told Reuters.

Naoise Connolly Ryan, whose husband, Mick Ryan, was killed in the 2019 Ethiopian Airlines Boeing 737 MAX crash, said the deal with Boeing was a "miscarriage of justice" in 2021.

"We don't want a third crash," Ryan said. "We're hoping the Department of Justice will do the right thing now and not dismiss the charges against Boeing."

A government official at the Wednesday meeting said the Justice Department will likely decide by the end of May if it believes there was a breach or not, two sources told Reuters.

Family members argue an independent monitor is needed to ensure Boeing's compliance with the agreement. Boeing's deal had no such requirement, unlike some past agreements with other companies.

Boeing did not comment on Wednesday, while the Justice Department declined comment.

In January 2021, Boeing agreed to pay $2.5 billion to resolve a criminal investigation into the company's conduct surrounding the crashes. The U.S. planemaker agreed to compensate victims' relatives and overhaul its compliance practices as part of the deal with prosecutors.  

In an earlier April meeting with family members' lawyers, Justice Department officials said they were looking at circumstances outlined in the 2021 deal that could put Boeing in breach of the agreement, such as the company's committing a felony or misleading U.S. officials, one of the people familiar with the matter said. 

(Reporting by Mike Spector in New York and David Shepardson in Washington; Additional reporting by Allison Lampert in Montreal and Chris Prentice in New York; Editing by Jonathan Oatis, Marguerita Choy and Leslie Adler)