(Adds details of court hearing, background on case)
By Nate Raymond
NEW YORK, March 20 A U.S. judge signed off on
Toyota Motor Corp's $1.2 billion settlement of criminal
charges that it concealed safety problems in its vehicles, an
accord that could serve as a model for a similar probe into
General Motors Co.
U.S. District Judge William Pauley approved the Japanese
automaker's deferred prosecution agreement at a Thursday hearing
His approval came one day after the U.S. Department of
Justice said it resolved its investigation into problems that
caused Toyota vehicles to accelerate suddenly.
Pauley said the case presented a "reprehensible picture of
corporate misconduct," and expressed hope that the government
would ultimately hold the responsible decisionmakers at Toyota
"This unfortunately is a case that demonstrates that
corporate fraud can kill," he said.
Pauley ruled shortly after Christopher Reynolds, Toyota's
North American legal chief, entered a "not guilty" plea on
behalf of the automaker to one count of wire fraud.
The $1.2 billion settlement is the largest such penalty ever
levied by the United States on an auto company. It resolves
issues that have dogged Toyota since at least 2007 and have been
linked to at least five deaths. Toyota still faces hundreds of
The settlement marked a huge victory for safety advocates
who fought for years for criminal prosecution of automakers over
Toyota agreed to a so-called statement of facts, in which it
admitted to having misled U.S. consumers and a federal regulator
about two problems that caused cars to accelerate even if
drivers tried to slow them down.
No guilty plea was required, and the government agreed not
to prosecute Toyota for wire fraud for three
years. The charge will be dismissed in 2017 if
Toyota follows the terms of the accord, which include allowing
an independent monitor to review its safety practices.
A spokeswoman for Toyota declined to comment, as did a
spokeswoman for U.S. Attorney Preet Bharara in Manhattan.
U.S. authorities are investigating GM over its handling of
an ignition switch defect linked to 12 deaths, and which
resulted in a recall last month of more than 1.6 million
vehicles, mostly in the United States.
Attorney General Eric Holder told reporters on Wednesday
that he hoped the Toyota deal would "serve as a model for how to
approach future cases involving similarly situated companies."
The Toyota investigation flowed out of publicity starting in
2009 over unintended acceleration linked to at least five
deaths, and which prompted hundreds of lawsuits.
Last year, a federal judge approved a settlement valued at
$1.6 billion to resolve claims by Toyota owners that the value
of their cars dropped because of the negative publicity.
The case is U.S. v. Toyota Motor Corp, U.S. District Court,
Southern District of New York, No. 14-cr-00186.
(Reporting by Nate Raymond in New York; additional reporting by
Ben Klayman in Detroit; editing by Matthew Lewis)