The US Justice Department informed Boeing Co. of impending fraud charges, leaving the aviation giant with a critical decision: plead guilty or face the uncertainties of a trial, according to a Bloomberg report.

This ultimatum was offered during a meeting on Sunday with the families of the victims of the two fatal 737 Max crashes and their attorneys, according to anonymous sources.

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The department gave Boeing until the end of the week to respond to the charges.

Additionally, Boeing was informed that a guilty plea would entail paying a significant fine and the appointment of a corporate monitor to oversee compliance.

Earlier reports from Bloomberg indicated that Boeing was negotiating with the department to resolve charges related to the two tragic crashes, which resulted in 346 fatalities.

This development also raises concerns about Boeing's future US government contracts, particularly at a time when its defense division's stability is crucial to offset the declining revenues from its commercial airplane sector.

The Justice Department’s push for charges follows a determination that Boeing violated a 2021 deferred-prosecution agreement.

This agreement, established in the final days of the Trump administration, allowed Boeing to avoid criminal prosecution provided it adhered to certain conditions, including the implementation of an effective compliance program to prevent and detect fraud violations.

In May, the department concluded that Boeing failed to meet this requirement, a finding Boeing contested.

The breach announcement followed a significant incident in January when a fuselage panel detached mid-flight from a Boeing jet operated by Alaska Airlines Inc. Subsequent investigations revealed that the plane was missing four critical bolts meant to secure the door plug, uncovering a series of manufacturing and quality control lapses.

Since the mid-air blowout, Boeing faced significant turmoil and triggered multiple investigations by lawmakers and government agencies, including the Justice Department.

The company's shares plummeted by about a third this year, and it has projected a USD 8 billion cash burn in the first half of 2024 due to a production slowdown.

In response to the incident, the Federal Aviation Administration (FAA) capped production of the 737 Max and mandated Boeing to submit a comprehensive plan to address factory quality issues.

Amidst these challenges, Boeing is also undergoing a leadership transition, searching for a new CEO to replace Dave Calhoun, who plans to step down later this year.

As part of the 2021 deferred-prosecution agreement, Boeing paid a USD 243 million criminal fine and admitted to deceiving the FAA regarding a crucial feature of the 737 Max’s flight control system.

The agreement required Boeing to enhance its internal safety controls and provide regular reports to the Justice Department, with the understanding that the government would withdraw the criminal charge after three years.

However, the January incident and subsequent findings prompted the department to reconsider the agreement’s terms.