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Toyota Reaches $1 Billion Settlement Over Acceleration Issues

The DOJ announced a settlement of more than $1 billion with Toyota stemming from incidents involving sudden acceleration issues in several models.
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Toyota must pay more than $1 billion in a settlement the Department of Justice announced Wednesday over the company’s response to consumer complaints stemming from 2009 and 2010 incidents involving sudden acceleration issues in several models.

The company also has been charged with criminal wire fraud, officials said, alleging that Toyota put out “misleading statements” about safety issues in Toyota and Lexus cars.

“Toyota confronted a public safety emergency as if it were simply a public relations problem,” Attorney General Eric Holder said in announcing what he called the largest criminal penalty levied against a car company in U.S. history, totaling $1.2 billion. “They mounted this cover up despite widely documented incidents, and even tragic accidents, like the one that took the lives of an off-duty California Highway Patrol officer and members of his family.”

The unintended acceleration issue generated hundreds of lawsuits and prompted Toyota to recall millions of automobiles beginning in 2009.The automaker was first subpoenaed by the Manhattan U.S. Attorney’s office in 2010.

The settlement comes after a four-year investigation that revealed how the company sought to keep details from regulators, officials said.

"Idiots! Someone will go to jail if lies are repeatedly told. I can't support this," one Toyota employee said after a meeting, according to a statement of facts released Wednesday.

The deal announced on Wednesday deferred criminal prosecution of Toyota for three years if the company fully complies with all aspects of the agreement, Holder said.

“When car owners get behind the wheel, they have a right to expect that their vehicle is safe,” Holder said. “If any part of the automobile turns out to have safety issues, the car company has a duty to be upfront about them, to fix them quickly and to immediately tell the truth about the problem and its scope. Toyota violated that basic compact.”

“Toyota has cooperated with the U.S. attorney’s office in this matter for more than four years,” Toyota spokeswoman Carly Schaffner told Reuters on Wednesday. “During that time, we have made fundamental changes to become a more responsive and customer-focused organization, and we are committed to continued improvements.”

Reuters contributed to this report.