Takata Corp. has pleaded guilty in federal court to one count of wire fraud and has agreed to pay $1 billion in criminal penalties for lying about its ammonium nitrate-based airbag inflators, which are blamed for at least 16 deaths and more than 180 injuries.
As part of a plea agreement, Tokyo-based Takata admitted that from 2000 through 2015, the company “carried out a scheme to defraud its customers and auto manufacturers by providing false and manipulated airbag-inflator test data that made the performance of the company’s airbag inflators appear better than it actually was,” according to the U.S. Department of Justice.
“Even after the inflators began to experience repeated problems in the field – including ruptures causing injuries and deaths – Takata executives continued to withhold the true and accurate inflator test information and data from their customers,” the Justice Department said.
Takata’s deadly airbags triggered the largest automotive recall in U.S. history.
“For over a decade, Takata lied to its customers about the safety and reliability of its ammonium nitrate-based airbag inflators,” said Acting Assistant Attorney Kenneth General Blanco. “Takata abused the trust of both its customers and the public by allowing airbag inflators to be put in vehicles knowing that the inflators did not meet the required specifications.”
The $1 billion criminal penalty includes $975 million in restitution and a $25 million fine, along with three years’ probation.
The $975 million will be separated into two restitution funds: $125 million for injury victims who haven’t reached a settlement with Takata, and $850 million to compensate automakers for the costs of replacing the recalled airbags.
In separate legal action, victims and their families have filed dozens of lawsuits against Takata and five automakers – BMW, Ford, Honda, Nissan and Toyota – alleging that the automakers knew Takata’s airbags were dangerous but continued to use them because they were inexpensive, according to a report in the Detroit News.
In December 2016, the Justice Department indicted three former Takata executives on wire-fraud charges stemming from the airbag scheme.
As part of the plea deal, Takata has agreed to appoint an independent monitor to track the company’s “compliance with its legal and ethical obligations” and report to the Justice Department for three years, Takata explained in a statement. The company also said it will implement rigorous quality-control, product-safety and data-security protocols.
“Takata deeply regrets the circumstances that have led to this situation and remains fully committed to being part of the solution,” said Takata Chairman and CEO Shigehisa Takada. ”We have taken aggressive actions to address past reporting lapses and will continue to work closely with regulators and our automotive customers to address the ongoing recalls and implement new technologies that advance vehicle safety, prevent injuries and save lives.”
