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Toyota settles U.S. fraud charge, pays $1.2B penalty
Starting in 2009, Toyota issued massive recalls, mostly in the U.S., totaling more than 10 million vehicles for various problems including faulty brakes, gas pedals and floor mats. (AP photo)

Toyota settles U.S. fraud charge, pays $1.2B penalty

WASHINGTON — Toyota agreed to pay $1.2 billion to settle an investigation by the U.S. government, admitting that it hid information about defects that caused Toyota and Lexus vehicles to accelerate unexpectedly and resulted in injuries and deaths.

Attorney General Eric Holder said Wednesday that the penalty is the largest of its kind ever imposed on an auto company. The four-year criminal investigation focused on whether Toyota promptly reported the problems related to unintended acceleration.

The company admitted to misleading consumers and regulators by assuring them that it had adequately addressed an acceleration problem stemming from ill-fitting floor mats— which attracted widespread publicity in 2009 following a car crash in San Diego that killed a family of four — through a limited safety recall of certain models.

Toyota knew at the time that it had not recalled other models susceptible to the same problem and also took steps to conceal from regulators a separate acceleration problem related to a faulty pedal, according to the Justice Department.

“In other words, Toyota confronted a public safety emergency as it if were a simple public relations problem,” Holder said at a news conference.

According to a statement of facts filed in the case, an exasperated Toyota employee was said to have remarked at one point, “Idiots! Someone will go to jail if lies are repeatedly told. I can’t support this.”

Prosecutors filed a criminal charge Wednesday alleging the company defrauded consumers by issuing misleading statements. They said they’ll move to dismiss the charge in three years if Toyota complies with the terms of the settlement. An independent monitor will review policies, practices and procedures at the company.

No Toyota executives were charged under the deal. U.S. Attorney Preet Bharara of the Southern District of New York, whose office brought the case, said he expected the agreement to be a “final resolution.”

The company still faces wrongful death and injury lawsuits that have been consolidated in California state and federal courts. In December, Toyota filed court papers after saying that it’s in settlement talks on nearly 400 U.S. lawsuits, but some other cases aren’t included in the talks.

The negotiations began less than two months after an Oklahoma jury awarded $3 million in damages to the injured driver of a 2005 Camry and to the family of a passenger who was killed. Toyota had won all previous unintended acceleration cases that went to trial. It was also the first case where attorneys for plaintiffs argued that the car’s electronics — in this case the software connected to a midsize Camry’s electronic throttle-control system — were the cause of the unintended acceleration.

At the time, legal experts said the Oklahoma verdict might cause Toyota to consider a broad settlement of the remaining cases.

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