Toyota’s DOJ Fine Largest in Automative History
March 19, 2014 · Posted by Danayit Musse
A four-year federal criminal investigation ended in a $1.2 billion fine for automotive manufacturer Toyota Motor Corporation—the largest penalty ever levied against an automaker by the Department of Justice. Toyota admitted to misleading the public about safety issues concerning their vehicles' sudden-acceleration problem, a defect that has plagued the company since 2009 and that cost them $1 billion in a class-action settlement two years ago. The LA Times reports:
The case focused on reports of floor mats jamming gas pedals and sticking gas pedals.
“Toyota put sales over safety and profit over principle,” said George Venizelos, assistant director of the FBI. “The disregard Toyota had for the safety of the public was outrageous. Not only did Toyota fail to recall cars with problem parts, they continued to manufacture new cars with the same parts they knew were deadly.”
The automaker was formally charged with one count of wire fraud, but if it abides by the settlement terms, the Justice Department will defer prosecution for three years and then seek to dismiss the charge.
“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,” [Attorney General Eric] Holder said.
Car owners “have a right to expect that their vehicle is safe” and manufacturers must be forthright about safety issues and fix them quickly, he said.
The settlement is being embraced as a victory by safety groups and advocates nationwide. The “possibility of criminal penalties is now front and center with automakers and that will change their behavior far more than a civil penalty will,” Clarence Ditlow, executive director for the Center for Auto Safety, told the LA Times.