In a significant development for Boeing, the aerospace company is allegedly facing the possibility of criminal charges after violating a settlement related to two fatal crashes of the 737 Max planes. Reports indicate that US prosecutors have informed the Department of Justice (DoJ) about Boeing's violation, which could lead to the filing of criminal charges against the manufacturer.

According to Reuters and CBS News, prosecutors working on the case have recommended criminal charges against Boeing. The DoJ's leaders have until 7 July to make a decision on whether they will pursue charges. The DoJ had previously informed a federal court in Texas about Boeing's violation of a 2021 settlement, in which the company agreed to pay $2.5 billion in penalties and compensation to airline customers and families affected by the crashes.

The court filing stated that Boeing failed to establish and enforce a compliance and ethics program to prevent fraud violations across its operations. If criminal charges are filed, it would be the latest round of consequences stemming from the two crashes that claimed the lives of 346 passengers. The crashes, which occurred in late 2018 and early 2019, resulted in the worldwide grounding of Boeing's 737 Max planes for nearly two years.

The crashes were attributed to a new design feature called the manoeuvring characteristics augmentation system (MCAS), which automatically dipped the nose of the planes to compensate for the relocation of larger engines. Pilots were unaware of this automated system, making the planes vulnerable if a single sensor failed.

Boeing had entered into a deferred prosecution agreement as part of the settlement, which shielded the company from a fraud charge related to allegations of concealing information about the MCAS system from aviation regulators. At the time of the settlement, the DoJ criticized Boeing's employees for prioritizing profit over transparency.

The original settlement was set to expire in January, potentially resolving one aspect of uncertainty for the company. However, as the settlement deadline approached, Boeing faced renewed scrutiny of its safety record following an incident where a door panel blew out of an Alaska Airlines plane mid-air.

While a final decision on new charges has not been made, sources suggest that Boeing could face charges beyond the original fraud conspiracy charge. The DoJ has the option to extend the settlement by a year or propose stricter terms.

These potential criminal charges cast a shadow over the final months of CEO Dave Calhoun's tenure, as he is set to retire later this year. Calhoun recently testified before the US Senate, acknowledging that something had gone wrong at the company, after whistleblowers allegedly faced retaliation for raising safety concerns in Boeing factories.

Boeing has declined to comment on the matter, and when contacted, the DoJ also refrained from providing any comments to Reuters and CBS News. The outcome of the DoJ's decision regarding criminal charges remains uncertain, and it could have significant implications for the company's future.