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Toyota near settlement of $1 billion dollars to end criminal probe

Toyota
Toyota
Photo by Kevork Djansezian/Getty Images

According to sources familiar with the matter, Toyota Motor Company is nearing a deal to end the criminal probe that's currently being conducted by the United States government, in regards to how the Japanese automaker disclosed the customers' complaints regarding their experiences with sudden acceleration. The Manhattan U.S Attorney Preet Bharara's office is investigating whether or not the company either falsified, or provided incomplete reports to the National Highway Traffic Safety Administration, relating to the known defects in their vehicles. They are also looking into possible mail and wire fraud charges that are associated with the allegations.

It is believed that the settlement may approach nearly $1 billion dollars.

To note, this does not include a separate settlement with the federal government that was approved last July. That particular settlement was over a class-action lawsuit concerning the design defects, which may have caused the vehicles to accelerate on their own, without any warning and/or involvement from the driver. The estimated value of that settlement was approximately $1.1 billion dollars, most of which went to the attorneys' fees, as well as various funds to research improvements in automotive safety.

Barring any major setbacks, the financial agreement could end the four-year investigation from U.S. prosecutors. Along Toyota has not admitted any wrongdoing, it has been said that they are fully cooperating with the prosecutors. That being said, according with those that are familiar with the matter, there are some sticking points in the negotiations, which could lead to the deal falling apart.

The settlement negotiations have been ongoing, in spite of a lack of evidence that there was a mechanical and/or an electronic defect, per the findings from the NHTSA. Despite those findings, Sen. Chuck Grassley (R-IA) has recommended that the investigation be reopened, due to what he suggested that the results were inconclusive. He has argued that the culprit to the unintended acceleration could be due to "tin whiskers", which could occur whenever tiny crystals form on circuit boards. The head of the NHTSA at the time, David Strickland, argued that the findings were in fact conclusive, and that the federal agency had also worked with scientists from NASA in order to thoroughly investigate the allegations. Strickland has since stepped down for another position in the private sector.

If the settlement is approved by both sides, it will be one of the largest amounts that the federal government has received from an automaker. To date, in addition to the aforementioned separate settlement, the NHTSA has fined Toyota four times for a total of $66.2 million dollars, in relation to the untimeliness of disclosing safety defects.

Toyota also received two subpoenas from the Securities and Exchange Commission in November 2013, as well as from the Manhattan prosecutors in February 2010, in connection with the "unintended acceleration and certain financial records".