Toyota to Pay $1.2 Billion for Acceleration Issues
March 25, 2014
WASHINGTON — The Department of Justice has announced a deferred prosecution agreement with Toyota, under which the company admits that it misled U.S. consumers by concealing and making deceptive statements about two safety issues affecting its vehicles, each of which caused a type of unintended acceleration.
The agreement, which is subject to judicial review, requires Toyota pay a $1.2 billion financial penalty — the largest penalty of its kind ever imposed on an automotive company — and imposes on Toyota an independent monitor to review and assess policies, practices and procedures related to Toyota’s safety-related public statements and reporting obligations. Toyota agreed to pay the penalty under a Final Order of Forfeiture in a parallel civil action filed today in the Southern District of New York.
The company was charged with criminal wire fraud for defrauding consumers in the fall of 2009 and early 2010 by issuing misleading statements about safety issues in Toyota and Lexus vehicles. If Toyota abides by all the terms of the agreement, the government will defer prosecution for three years and then seek to dismiss the charge.
“Rather than promptly disclosing and correcting safety issues they were aware of, Toyota made misleading public statements to consumers and gave inaccurate facts to members of Congress,” said Attorney General Eric Holder. “When car owners get behind the wheel, they have a right to expect that their vehicle is safe. 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.
“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.”