U.S. prosecutors are recommending to senior Justice Department officials that criminal charges be brought against Boeing (BA.N), opens new tab after finding the planemaker violated a settlement related to two fatal crashes, two people familiar with the matter told Reuters.

The Justice Department must decide by July 7 whether to prosecute Boeing. The recommendation of prosecutors handling the case has not been previously reported.

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In May, officials determined the company breached a 2021 agreement that had shielded Boeing from a criminal charge of conspiracy to commit fraud arising from two fatal crashes in 2018 and 2019 involving the 737 MAX jet.

Under the 2021 deal, the Justice Department agreed not to prosecute Boeing over allegations it defrauded the Federal Aviation Administration so long as the company overhauled its compliance practices and submitted regular reports. Boeing also agreed to pay $2.5 billion to settle the investigation.

Boeing declined to comment. It has previously said it has "honored the terms" of the 2021 settlement, which had a three-year term and is known as a deferred prosecution agreement. Boeing has told the Justice Department it disagrees with its determination that the company violated the settlement, Reuters reported this month.

A spokesperson for the Justice Department declined to comment.

The two sides are in discussions over a potential resolution to the Justice Department's investigation and there is no guarantee officials will move forward with charges, the two sources said. The internal Justice Department deliberations remain ongoing and no final decisions have been reached, they added. (Reuters)

•PHOTO: An aerial photo shows Boeing 737 Max airplanes parked on the tarmac at the Boeing Factory in Renton, Washington, March 21, 2019

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