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March 19, 2014

US files charge against Toyota, $1.2B penalty

WASHINGTON (AP) — The U.S. government announced a $1.2 billion settlement with Toyota Motor Corp. on Wednesday and filed a criminal charge alleging the company defrauded consumers by issuing misleading statements about safety issues in Toyota and Lexus vehicles. The penalty is the largest of its kind ever imposed on an auto company, the Justice Department said.

The action concludes a yearslong criminal investigation into the Japanese automaker's disclosure of safety problems, which focused on whether Toyota was forthright in reporting problems to unintended acceleration troubles.

The company admitted to misleading consumers and regulators in providing assurances that it had addressed the problems — which became public 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 other models susceptible to the same acceleration problem had not been recalled and also took steps to conceal 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," Attorney General Eric Holder said at a news conference.

The company faces a criminal wire fraud charge in New York that prosecutors say they will move to dismiss in three years if Toyota complies with the terms of the deal. Under a deferred prosecution agreement, 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."

"As you might imagine, when you have a company with individuals who are responsible for unlawful conduct in other jurisdictions, there are problems of evidence and problems of proof," he said.

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