Toyota Motor Corp. has agreed to pay a $1.2 billion financial penalty to settle a fraud charge related to misleading statements about the safety of its cars to the public and regulators, the U.S. Department of Justice said today.
Attorney General Eric Holder Jr. said at a press conference at Main Justice this morning that Toyota will also submit to a review by an independent monitor as a condition of a deferred-prosecution agreement. The monitor will look at, among other things, how the company reports safety issues.
The agreement was signed by Christopher Reynolds, general counsel and chief legal officer for Toyota Motor North America Inc. Three Debevoise & Plimpton partners in New York—James Johnson, Matthew Fishbein and Helen Cantwell—represented Toyota in the settlement.
“Put simply, Toyota’s conduct was shameful,” Holder said. “It showed a blatant disregard for systems and laws designed to look after the safety of consumers. By the company’s own admission, it protected its brand ahead of its own customers. This constitutes a clear and reprehensible abuse of the public trust.”
The yearslong criminal investigation focused on how the automaker disclosed complaints about problems of sudden acceleration associated with its most popular Toyota and Lexus models, Holder said. Prosecutors filed an information against Toyota in the U.S. District Court for the Southern District of New York.
“Rather than promptly disclosing and correcting safety issues about which they were aware, Toyota made misleading public statements to consumers and gave inaccurate facts to members of Congress,” Holder said. “And they concealed from federal regulators the extent of problems that some consumers encountered with sticking gas pedals and unsecured or incompatible floor mats that could cause these unintended-acceleration episodes.”
Holder said he hoped the resolution of the case will serve as a model for how to approach similar cases in the future, and that it would send a message to other car companies about not repeating Toyota’s mistake of putting the company’s reputation before customer safety.
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