Toyota hit by $1.2B fine, admits deception;

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Toyota hit by $1.2B fine, deception

By Danielle Douglas and A. Fletcher / The Washington Post

Mar 20, 2014 at 12:01AM

WASHINGTON — Motor lied to regulators, and the public for years about the acceleration of its vehicles, a deception caused the world’s largest on Wednesday to be hit with a $1.2 Justice Department fine.

say Toyota’s efforts to conceal the and protect its corporate image led to a of fatalities that could been prevented. The settlement, amounts to more than a of Toyota’s 2013 profit, is called the largest criminal imposed on a car company in U.S.

Toyota says in the settlement it misled Americans by making statements about the safety that caused its vehicles to up uncontrollably, a stark admission for a that has built its brand on and reliability.

Early on, Toyota that driver error was to saying that some may have hit the gas when they to hit the brake. Even after recalls to address problematic mats that in some pinned down accelerators, the hid a flawed gas pedal design it knew did the same thing, to documents accompanying the agreement.

The deal is a victory for the government and serve as a model for a case General Motors, which is investigation by Congress, safety and federal prosecutors for taking than a decade to issue a for an ignition-switch problem it has linked to 31 and 12 deaths.

“Companies that inherently dangerous products be maximally transparent, not two-faced,” Preet Bharara, U.S. for the Southern District of New York, who led the investigation and — according to a law enforcement who spoke on the condition of anonymity he was not authorized to speak on the topic — has a preliminary criminal probe of GM. is why we have undertaken this action. And the entire auto should take notice.”

comes to light

Safety erupted around some of most popular models in when California Highway officer Mark Saylor and family members were in a high-speed crash caused by the acceleration of his car. The terrifying was captured in a 911 emergency call in Saylor’s brother-in-law described out of control in a Lexus at more 125 mph before the car crashed, killing all occupants.

Relatives of the Saylor family, who a case against Toyota for an amount in 2010, declined an attorney to comment on the new settlement.

the accident, Toyota eventually millions of vehicles — one of the largest in the history of the automotive industry. But prosecutors found that the had not come completely clean.

The assured the public that the cause” of unintended acceleration had addressed by the recall, blaming mats that accidentally the depressed gas pedals of cars and

But Toyota knew that it had not recalled had similar floor-mat the agreement said. Also, the hid from federal regulators a cause of unintended acceleration in its a sticky gas pedal.

The problem was caused by plastic inside the pedal that cause the accelerator to become in a partially depressed position. The were installed in several including the Camry, the Matrix, the and the Avalon.

The problem had surfaced in vehicles in Europe in 2008, instances of uncontrolled acceleration. In 2009, the company gave Toyota distributors information the sticky pedals along instructions to replace them if complained.

Meanwhile, rather issuing a recall, the company directed its pedal supplier to parts in Europe and made to roll out the same change in the States.

By then, the problem had cropped up in cars sold in the States, according to the documents. At the same time as the highly San Diego accident, Toyota sent a memo to the company’s in Japan warning of an unintended-acceleration apart from the one caused by the mats.

Deception continues

For months, Toyota received evidence of the pedal problem and made plans to address it informing federal safety as required by law. Concerned federal officials would about these plans, the canceled the change in pedal and communicated that change rather than in writing, so would be no paper trail.

After more instances of pedals came to the company’s in 2009, executives decided to the issue to federal regulators and a new recall. But the deception did not end there. the recall was completed, the company an inaccurate timeline and submitted it to regulators and Congress, making it as if the company had acted quickly to the sticky-pedal issue.

“Rather promptly disclosing and correcting issues about which were aware, Toyota misleading public statements to and gave inaccurate facts to of Congress,” Attorney General Holder said at a news announcing the settlement.

As part of the Toyota has entered into is called a deferred-prosecution agreement gives federal prosecutors the to pursue criminal charges if the fails to live up to the agreement, to the department.

The automaker must acknowledge the of the government’s case and have an monitor review its safety None of its employees will criminal charges.

Christopher chief legal officer at Motor North America, the company took full for the effects of its actions on consumers at the of the recalls.

“We have made changes across our global to become a more responsive he said in a statement. “Entering agreement, while difficult, is a step toward putting unfortunate chapter behind

In addition to the $1.2 billion which will go into the coffers, Toyota faces 400 wrongful-death and personal-injury lawsuits. It has at least seven lawsuits the past few months.

“The Department settlement with is a complete game-changer,” said Ditlow, executive director of the for Auto Safety, a watchdog “Until today, automakers insignificant fines and no criminal under the Vehicle Safety Today’s fine of $1.2 against Toyota makes the $35 maximum fine that regulators) can impose seem chump change.”

Still, critics of the settlement say the fine means little as as no executives face jail The facts of the case describe a of coordinated lying and greed warrants stiffer punishment, say.

“Money as a deterrent is of no to these overpaid and overindulged as the companies are flush with said David Peirez, a at the law firm of Reisman, Peirez, and Capobianco. “Deferred-prosecution agreements are a — all they defer is a jail but not the next recall.”


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