NEW YORK/WASHINGTON, July 7 (Reuters) - Boeing ( BA )

has agreed to plead guilty to a criminal fraud conspiracy charge

to resolve a U.S. Justice Department investigation linked to two

737 MAX fatal crashes, the government said in court filing late

on Sunday.

The plea, which requires a federal judge's approval, would

brand the planemaker a convicted felon. Boeing ( BA ) will also pay a

criminal fine of $243.6 million, the Justice Department (DOJ)

said in a document filed in federal court in Texas that provided

an overview of the agreement in principle.

The charge relates to two 737 MAX crashes in Indonesia and

Ethiopia over a five-month period in 2018 and 2019 that killed

346 people and prompted the families of the victims to demand

that Boeing ( BA ) face prosecution.

A guilty plea potentially threatens the company's ability to

secure lucrative government contracts with the likes of the U.S.

Defense Department and NASA, although it could seek waivers.

Boeing ( BA ) became exposed to criminal prosecution after the Justice

Department in May found the company violated a 2021 settlement

involving the fatal crashes.

Still, the plea spares Boeing ( BA ) a contentious trial that could

have exposed many of the company's decisions leading up to the

fatal MAX plane crashes to even greater public scrutiny. It

would also make it easier for the company, which will have a new

CEO later this year, to try to move forward as it seeks approval

for its planned acquisition of Spirit AeroSystems ( SPR ).

A Boeing ( BA ) spokesperson confirmed it had "reached an agreement

in principle on terms of a resolution with the Justice

Department."

The planemaker also agreed to invest at least $455 million

over the next three years to strengthen its safety and

compliance programs, according to the filing.

The DOJ will appoint a third-party monitor to oversee the

firm's compliance. The monitor will have to publicly file with

the court annual reports on the company's progress. Boeing ( BA ) will

also serve a probation, during which it commits not to violate

any laws, until the end of the monitor's three-year term.

The DOJ on June 30 offered a plea agreement to Boeing ( BA ) and

gave the company until the end of the week to take the deal or

face a trial on a charge of conspiring to defraud the Federal

Aviation Administration (FAA) in connection with a key software

feature tied to the fatal crashes.

The Justice Department's push to charge Boeing ( BA ) has deepened

an ongoing crisis engulfing Boeing ( BA ) since a separate January

in-flight blowout exposed continuing safety and quality issues

at the planemaker.

A panel blew off a new Boeing 737 MAX 9 jet during a Jan. 5

Alaska Airlines flight, just two days before the 2021 deferred

prosecution agreement that had shielded the company from

prosecution over the previous fatal crashes expired. Boeing ( BA )

faces a separate ongoing criminal probe into the Alaska

incident.

The agreement only covers Boeing's ( BA ) conduct before the fatal

crashes and does not shield the planemaker from any other

potential investigations or charges related to the January

incident or other conduct.

Boeing ( BA ) is set to plead guilty to making knowingly false

representations to the Federal Aviation Administration about

having expanded a key software feature used on the MAX to

operate at low speeds. The new software saved Boeing ( BA ) money by

requiring less intensive training for pilots.

The Maneuvering Characteristics Augmentation System (MCAS)

is a software feature designed to automatically push the

airplane's nose down in certain conditions. It was tied to the

two crashes that led to the FAA grounding the plane for 20

months, an action that cost Boeing ( BA ) $20 billion and was lifted by

the government in November 2020.

As part of the deal, Boeing's ( BA ) board of directors will meet

with relatives of those killed in the MAX crashes, the filing

said.

DOJ officials modified their process for selecting an

independent monitor in response to backlash from one of the

lawyers representing victims' relatives, who argued the families

should select the candidate instead of the government choosing

from a pool of candidates Boeing ( BA ) would propose, according to the

court filing.

U.S. officials adjusted their plea offer to Boeing ( BA ) to

stipulate they would select the pool of qualified candidates

based on a public solicitation to which anyone can apply,

including candidates the families support.

Lawyers for some of the families of the people killed in

the two MAX crashes said they intended to exercise their right

to oppose the deal.

"The families intend to argue that the plea deal with

Boeing ( BA ) unfairly makes concessions to Boeing ( BA ) that other criminal

defendants would never receive and fails to hold Boeing ( BA )

accountable for the deaths of 346 persons," they said in a

separate court filing.

The agreement does not shield any executives, the DOJ filing

said, though charges against individuals are seen as unlikely

due to the statute of limitations. A former Boeing chief

technical pilot was charged in connection with the Boeing ( BA ) fraud

agreement but acquitted by a jury in 2022.

The agreed penalty will be Boeing's ( BA ) second fine of $243.6

million related to the fatal crashes - bringing the full fine to

the maximum allowed. The company paid the fine previously as

part of 2021's $2.5 billion settlement. The $243.6 million fine

represented the amount Boeing ( BA ) saved by not implementing

full-flight simulator training for MAX pilots.

Families of the victims of those crashes slammed the

previous agreement and this year pressed the Justice Department

to seek as much as $25 billion from Boeing ( BA ).

This year, the DOJ has held several meetings to hear from

the victims' families as they investigated Boeing's ( BA ) breach of

the 2021 deal.

The DOJ and Boeing ( BA ) are working to document the full

written plea agreement and file it in federal court in Texas by

July 19, the DOJ said in the court filing.