A U.S. judge signed off on Toyota’s $1.2 billion settlement of criminal charges that it concealed safety problems in its vehicles, the largest penalty ever levied by the United States on an auto company. The accord could serve as a model for a similar probe into General Motors’ handling of the ignition switch problem.
U.S. District Judge William Pauley approved Toyota’s deferred prosecution agreement at a Thursday hearing in Manhattan, one day after the U.S. Department of Justice said it resolved its investigation into problems that caused Toyota vehicles to accelerate suddenly.
“This unfortunately is a case that demonstrates that corporate fraud can kill,” the judge was quoted as saying byReuters, adding that he hoped the government would ultimately hold the responsible decision-makers at Toyota accountable.
The settlement resolves issues that have dogged Toyota since at least 2007 and have been linked to at least five deaths. However, Toyota still faces hundreds of private lawsuits. The Japanese carmaker agreed to a so-called statement of facts, admitting to having misled U.S. consumers and a federal regulator about two problems that caused cars to accelerate even if drivers tried to slow them down.
No guilty plea was required, with the government agreeing not to prosecute Toyota for wire fraud for three years. The charge will be dismissed in 2017 if Toyota follows the terms of the accord, including allowing an independent monitor to review its safety practices.
“Entering this agreement, while difficult, is a major step toward putting this unfortunate chapter behind us,” said Christopher P. Reynolds, chief legal officer, Toyota Motor North America. “We remain extremely grateful to our customers who have continued to stand by Toyota. Moving forward, they can be confident that we continue to take our responsibilities to them seriously.”
By Dan Mihalascu
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