Toyota to Pay $1.2 Billion to Settle U.S. Criminal Probe

Toyota_Camry_2008_IM

Toyota has reached a $1.2 billion settlement — yes, with a "b" — with federal prosecutors over its handling of more than 4 million recalled cars because of unintended acceleration in 2009 and 2010. In the conclusion of a lengthy investigation, the automaker will admit that "it misled U.S. consumers by concealing and making deceptive statements" about safety issues related to unintended acceleration, the U.S. Justice Department announced Wednesday.

More News on Toyota Recalls

Toyota will also have to submit to third-party monitoring of its safety policies. If the automaker pays the full fine and complies with the terms of the settlement, the government will defer prosecution and dismiss a criminal fraud charge against the automaker.

"If any part of the automobile turns out to have safety issues, the car company has a duty to be upfront about them, to fix them quickly, and to immediately tell the truth about the problem and its scope," U.S. Attorney General Eric Holder said in a statement. "Toyota violated that basic compact. Other car companies should not repeat Toyota's mistake: a recall may damage a company's reputation, but deceiving your customers makes that damage far more lasting."

Indeed, the penalty is the largest that U.S. prosecutors have ever imposed on an automaker, the Justice Department said. It's also the latest in a four-year string of costly penalties at Toyota associated with unintended acceleration. In 2010, the National Highway Traffic Safety Administration fined the automaker $48.8 million in civil penalties over the recall. That same year, Toyota settled a wrongful-death lawsuit at $10 million for a widely publicized Lexus ES crash in Southern California. The automaker expanded its recall in June 2012 to include the Lexus RX SUV. Six months later, NHTSA fined Toyota $17.35 million for delaying the Lexus recall — at the time, the highest recall-related civil penalty ever leveled on an automaker. That same month, Toyota announced it would pay $1.1 billion to settle a class-action lawsuit for depreciation among current owners, and in 2013 it settled the first of scores of other wrongful-death suits.

"In the more than four years since these recalls, we have gone back to basics at Toyota to put our customers first," Christopher P. Reynolds, Toyota's chief legal officer, said in a statement. "Entering this agreement, while difficult, is a major step toward putting this unfortunate chapter behind us."

Cars.com photo by Ian Merritt

Comments 

Ben

Hope GM gets the same treatment (penalty) regarding the ignition switch issue of which they were well aware!

Tony

Dumb government

Martin

Finally Toyota gets screwed!

Roger

What happens to the money?.

Tony

Haliburton will get it to develop oil fields in Iraq

Tsung GT500

Eric Holder is a modern day SS soldier. Intimidation and thuggery are his primary tactics. To bad Toyota wasn't a big Obama donor for if they were they'd be at the White House receiving an award.

Will this have an impact on the sales of Toyota cars in the other region?

Jack B. Nimble

Toyota was fined because they deceived the public about their product safety, and refused to order a recall because it would've hurt their "impeccable" image. If GM did the same, then this would definitely apply.
For those of you hating on the government, you should be glad that this move was taken. In Japan, Toyota has hidden many defects of their cars, and they've gotten away. Mitsubishi also did the same, but they didn't have the luck Toyota had, because Toyota makes Japan proud. BTW, Toyota has given its workers in Japan their first raise since 2008... your first raise in 6 years, wow! What a caring and considerate car company. It's all about profit over people.

Vik

Jack: +1. It is hilarious to see the politically-motivated comments on here. The same people who laugh at the McD's coffee burning case without knowing all the facts of the case. The same people touting "personal responsibility" when they do not apply the same rules when it comes to "corporate responsibility".

bob

Toyota is still the brand to beat. Ford, Chrysler & GM are also deceiving money hungry corporate manipulators when it comes to compromising safety. Hold the engineers & bean counters responsible!

I think Toyota is getting what they deserve

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