GM's Ignition Probe to Cost It $900M in Criminal Settlement

The General Motors ignition probe will cost the auto giant $900 million in penalties, according to federal prosecutors in New York City who announced a criminal settlement in the case on Thursday.

The money comes in what prosecutors are calling a "deferred prosecution agreement" of a wire fraud case against General Motors, according to documents filed in the case.

GM's ignition switch flaw caused vehicle's engines to shut off during driving, and the resulting disengagement of airbags, power steering and power brakes has been linked to at least 124 deaths, CNN reported.

The automaker said its employees knew of the problem nearly a decade before the company started to recall vehicles in 2014, but no one from the company was individually charged.

General Motors also agreed to a partial settlement in private litigation with drivers, passengers and families involved with the ignition probe, along with connected shareholder litigation, reported Reuters.

The company will be charge itself $575 million in the third quarter for those private settlements.

"GM knowingly manufactured and sold several models of vehicles equipped with the defective switch," reads the prosecutor's statement of facts read in the agreement. "By approximately the spring of 2012, certain GM personnel knew that the defective switch could cause frontal airbag non-deployment in at least some model years of the Cobalt, and were of several fatal incidents and series injury that occurred …"

"This knowledge extended well above the ranks of investigating engineers to certain supervisors and attorneys at the company – including GM's safety director and GM safety attorney," said the prosecutors.

Prosecutors said that even with that knowledge, General Motors failed to correct a 2005 statement that the "defective switch" posed no safety problem.

A former federal prosecutor, Anton Valukas, issued an internal report in 2014 saying that General Motors was a "haven of dysfunction" where the defect was ignored and not pursued for years.

The Justice Department granted the automaker one reprieve by shielding it from claims of wrongful death made before its 2009 bankruptcy.

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