Boeing faces charges for violating settlement post 737 Max crashes

(L-R) Diana Sotomyor, Hayley Freedman and Deveney Williams, friends of Samya Stumo, who was killed when Ethiopian Airlines Flight ET302 crashed in Ethiopia, listen to testimony during a House Transportation and Infrastructure Committee hearing on Cap

Boeing has violated a settlement that allowed the company to avoid criminal prosecution after two deadly crashes involving its 737 Max aircraft, according to the Justice Department. 

Prosecutors made their case to a federal judge Tuesday.

The Justice Department will now have to decide whether to file charges against the aircraft maker. Prosecutors plan tell the court no later than July 7 how they plan to proceed. 

Boeing failed to make changes to prevent it from violating federal anti-fraud laws — a condition of the the 2021 settlement, Glenn Leon, the head of the fraud section of the Justice Department’s criminal division said in a letter.

The determination means that Boeing could be prosecuted "for any federal criminal violation of which the United States has knowledge," including the charge of fraud that the company hoped to avoid with the $2.5 billion settlement, the Justice Department said.

RELATED: Boeing orders tumble as troubled aircraft maker struggles to overcome its latest crisis

However, it is not clear whether the government will prosecute the manufacturing giant.

"The Government is determining how it will proceed in this matter," the Justice Department said in the court filing.

Investigations into the 2018 and 2019 crashes pointed to a flight-control system that Boeing added to the Max without telling pilots or airlines. Boeing downplayed the significance of the system, then didn’t overhaul it until after the second crash.

The Justice Department investigated Boeing and settled the case in January 2021. After secret negotiations, the government agreed not to prosecute Boeing on a charge of defrauding the United States by deceiving regulators who approved the plane.

In exchange, the company paid $2.5 billion — a $243.6 million fine, a $500 million fund for victim compensation, and nearly $1.8 billion to airlines whose Max jets were grounded.

Boeing has faced civil lawsuits, congressional investigations and massive damage to its business since the crashes in Indonesia and Ethiopia.

The Associated Press contributed to this report. This story was reported from Los Angeles.