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Saturday, June 22, 2024 | Back issues
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Toyota Settles Criminal Safety Probe for $1.2B

(CN) - Toyota agreed to pay $1.2 billion to settle a criminal probe into the sudden acceleration of vehicles that led to one of the largest vehicle recalls in history.

The Japanese car maker admitted to having misled consumers and regulators about the mounting acceleration complaints in 2009 "as part of efforts to defend its brand."

"In other words, Toyota confronted a public safety emergency as if it were a simple public relations problem," Attorney General Eric Holder said in a statement Wednesday.

Toyota faced intense scrutiny in the fall of 2009, following a widely publicized Aug. 28, 2009 accident in San Diego that killed a family of four.

It recalled some of its vehicles with faulty floor mats that year, but delayed a broader recall until early 2010. Meanwhile, Toyota told regulators and the National Highway Traffic Safety Administration that the limited recalled had "addressed" the "root cause" of the acceleration problem, despite knowing that other Toyota cars had similar design flaws.

The Justice Department said Toyota also tried to hide a second problem causing unintended acceleration: gas pedals getting stuck.

"Rather than promptly disclosing and correcting safety issues about which they were aware, Toyota made misleading public statements to consumers and gave inaccurate facts to Members of Congress," Holder said. "And they concealed from federal regulators the extent of problems that some consumers encountered with sticking gas pedals and unsecured or incompatible floor mats that could cause these unintended acceleration episodes."

As part of the settlement, Toyota agreed to fully admit wrongdoing and pay the $1.2 billion federal fine -- the largest criminal penalty imposed on a car company in U.S. history -- under a forfeiture order filed Wednesday.

The company must also allow an independent monitor to review and assess its policies and procedures.

If Toyota abides by all the terms of the settlement, the Justice Department agreed to defer prosecuting the company on the count of criminal wire fraud it filed Wednesday in Federal Court in Manhattan. The United States would then seek dismissal after three years, assuming Toyota met its obligations.

"Toyota stands charged with a criminal offense because it cared more about savings than safety and more about its own brand and bottom line than the truth," U.S. Attorney Preet Bharara said in a statement about the criminal charge.

Holder called Toyota's conduct "shameful," saying it "showed a blatant disregard for systems and laws designed to look after the safety of consumers."

"By the company's own admission, it protected its brand ahead of its own customers," the attorney general said. "This constitutes a clear and reprehensible abuse of the public trust."

The settlement will be reviewed by a judge.

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