Toyota Motor Corp. and the U.S. Attorney’s Office in New York and are nearing a settlement that could top $1 billion to resolve the Justice Department’s four-year criminal investigation into whether the automaker misled federal regulators over sudden-acceleration claims and driver complaints.
Two people briefed on the investigation said a deal could be announced in the next few weeks but that the final terms are still being negotiated. They warned that a final deal could still fall apart.
“Toyota continues to cooperate with the U.S. Attorney’s Office in this matter. In the nearly four years since this inquiry began, we’ve made fundamental changes to become a more responsive, customer-focused organization, and we’re committed to continued improvements,” company spokesman Ed Lewis said in a statement.
The Wall Street Journal first reported news of the possible settlement earlier Friday.
The two with knowledge of the matter said a deal would likely include a deferred prosecution agreement — in essence, Toyota would be on probation for a period of years. Toyota is not expected to have to plead guilty as part of a settlement. In previous settlements, it has not admitted wrongdoing.
One big sticking point during settlement talks between Toyota and the Justice Department has been whether the settlement would include allegations that Toyota misled Congress. It does not appear that a final settlement will accuse Toyota of lying to Congress.
Settling the Justice Department investigation led by U.S. Attorney Preet Bhahara in New York would be the latest effort by the Japanese automaker to get past the 2009-2010 recall crisis. In February, Toyota agreed to pay $29 million to settle allegations by 29 state attorneys general that the automaker concealed its knowledge of safety defects in accelerator pedals and will agree to significant restrictions in its advertising. The settlement also barred Toyota from advertising the safety of vehicles without sound engineering and scientific data to back such claims, the settlement agreement says.
In late December 2012, Toyota agreed to the largest-ever auto civil settlement in history, worth at least $1.1 billion.
The attorneys representing Toyota owners said the settlement was worth between $1.2 billion and $1.4 billion, which includes hundreds of millions of indirect payments to owners and former owners, as well as the installation of brake-override systems in an estimated 3.25 million vehicles.
That settlement came after Toyota paid nearly $70 million in U.S. fines after the National Highway Traffic Safety Administration had failed to recall millions of vehicles in a timely fashion. It’s not clear if the Justice Department settlement would prompt NHTSA to reopen any investigations. That included a record-setting $17.35 million U.S. fine for delaying the recall of 154,000 Lexus SUVs over pedal entrapment issues, as Toyota promised it would make significant changes in how it responds to safety issues.
Toyota recalled more than 14 million vehicles worldwide for pedal entrapment issues in 2009 and 2010.
Despite a half-dozen NHTSA investigations into sudden acceleration claims in Toyotas starting in 2000, the automaker initially did little. In September 2007, Toyota agreed to recall 55,000 all-weather floor mats. Documents obtained by Congress show Toyota bragged about saving more than $100 million by not conducting a more expensive recall.
The high-profile deaths of four people, including an off-duty California Highway Patrol officer behind the wheel near San Diego in 2009 brought the issue to the headlines. The officer, his wife, daughter and brother-in-law were killed when a Lexus SUV sped out of control. Investigators blamed a wrongly installed trapped floor mat in a dealer loaner.
Over 10 years, NHTSA received nearly 3,100 complaints, alleging at least 93 deaths from Toyota sudden acceleration incidents, but has confirmed a link in just five deaths.