Justice Dept. Says Boeing Violated 2021 Settlement Over Max Plane

The Justice Department said Tuesday that Boeing violated a 2021 settlement over problems with the company’s 737 Max model that led to two fatal plane crashes in 2018 and 2019.

In a letter to a federal judge, the department said Boeing failed to “design, implement and enforce” a compliance and ethics program to prevent and detect violations of U.S. fraud laws in company operations. The creation of this program was a condition of Boeing’s settlement, which also included a $2.5 billion penalty.

The Justice Department’s decision opens the door to potential prosecution of a 2021 criminal charge accusing Boeing of conspiring to defraud the Federal Aviation Administration, although Boeing may challenge Tuesday’s decision.

In a statement, Boeing said the company believes it has honored the terms of the agreement, adding that it looks forward to the opportunity to respond.

“In doing so, we will work with the Department with the utmost transparency, as we have done throughout the term of the agreement,” Boeing said in its statement.

The Justice Department declined to comment. Paul G. Cassell, an attorney representing the families of victims of the fatal plane crashes, said his clients plan to meet with the government on May 31 to discuss next steps in the case.

When the government reached a deal with Boeing in January 2021, many families of the crash victims said the Trump administration had been too lenient toward the plane maker.

“This is a positive first step and for families it will take time,” Mr Cassell said. “But we need to see additional steps from the DOJ to hold Boeing accountable.”

Crashes of 737 Max 8 planes in Indonesia and Ethiopia killed 346 people, prompting the FAA to ground the entire 737 Max fleet. An investigation found that both accidents involved the erroneous activation of a maneuvering system designed to prevent in-flight stalling.

In another settlement, the Securities and Exchange Commission said Boeing offered misleading assurances about the 737 Max’s safety in public statements after the two crashes, despite knowing that the maneuvering system posed an ongoing safety problem.

The Justice Department reached its conclusion at a tumultuous time for Boeing, which has been under intense regulatory scrutiny since a door panel exploded from a 737 Max 9 plane during a flight. Alaska Airlines departing from Portland, Oregon, in January. In March, the company announced that its chief executive, Dave Calhoun, would step down at the end of the year, along with Stan Deal, head of the division that makes planes for airlines and other commercial customers.

Mr. Calhoun replaced Dennis A. Muilenburg, who led the company during the 2018 and 2019 crashes. Boeing fired Mr. Muilenburg, whose performance during the crisis angered lawmakers and alienated victims’ families.

Marc Walker reports contributed.