Toyota Close to $1B Deal With Feds Over Acceleration Probe

Friday, 07 Feb 2014 11:06 PM

By Cathy Burke

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Toyota is reportedly closing in on a deal to pay more than $1 billion — the largest government fine ever paid by an automaker — to end a four-year federal criminal probe related to complaints of sudden acceleration.

An agreement could come within weeks if still-unresolved issues can be ironed out, The Wall Street Journal reported Friday night.

"This is a landmark case because the auto industry has bobbed and weaved and done everything possible to avoid criminal sanctions forever," Joan Claybrook, a former head of the National Highway Traffic Safety Administration, told The Journal.

The NHTSA determined four years ago that five people in two incidents had died as a result of accidents involving claims of sudden acceleration. In the following three years, Toyota was fined four times by NHTSA for a total of $66.2 million for failing to report safety defects in a timely manner, The Journal reported.

Three of the fines were related to sudden acceleration.
Toyota spokeswoman Julie Hamp told the paper the automaker "continues to cooperate with the U.S. attorney's office in this matter," adding:

"And in the nearly four years since this inquiry began, we've made fundamental changes to become more responsive and customer focused and we're committed to continue to improve."

The Journal noted no evidence of mechanical or electronic flaws has ever been found to explain the unintended acceleration incidents.

The NHTSA determined driver error — or accelerator pedals getting snagged by floor mats — were the problem in most of the accidents.

Toyota itself has blamed drivers, stuck accelerators or floor mats that trapped the gas pedal for the acceleration claims that led to the big recalls of Camrys and other vehicles. The company has repeatedly denied its vehicles are flawed.

But federal prosecutors in the office of Manhattan U.S. Attorney Preet Bharara are looking into whether Toyota made false or incomplete disclosures to regulators about possible defects, The Journal reported, citing unnamed sources.

The prosecutors also are looking into possible mail and wire fraud violations linked to alleged false disclosures, The Journal reported.

The Journal reported Toyota disclosed in financial filings last November it had gotten two subpoenas each from the Securities and Exchange Commission and Manhattan federal prosecutors — in February and June 2010 — related to "unintended acceleration and certain financial records."

Toyota also revealed investigators interviewed witnesses both from Toyota and outside the company and said it was cooperating.

The sudden acceleration issue shot into the headlines in 2009 after an off-duty California Highway Patrolman and his family were killed when their borrowed Lexus careened off the highway at around 120 mph.

The recording of a passenger's last minute 911 call captured the driver's frantic efforts to stop the vehicle, The Journal noted.

In December, Toyota entered into talks to settle nearly 400 state and federal lawsuits that allege sudden unintended acceleration problems with its vehicles led to deaths and injuries.
The Journal reported those talks are continuing.

The Associated Press contributed to this report.

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