G.M. Inquiry Said to Find Criminal Wrongdoing

Photo The ignition switch of a 2005 Chevrolet Cobalt. In February 2014, the automaker began recalling Cobalts and other small cars with faulty ignitions. Credit Molly Riley/Associated Press Justice Department investigators have identified criminal wrongdoing in General Motors failure to disclose a defect tied to at least 104 deaths, and are negotiating what is expected to be a record penalty, according to people briefed on the inquiry.

A settlement could be reached as soon as this summer. The final number is still being negotiated, but it is expected to eclipse the $1.2 billion paid last year by Toyota for concealing unintended acceleration problems in its vehicles, said the people, who did not want to be identified because the negotiations werent complete.

G.M.s eagerness to resolve the investigation a strategy that sets it apart from Toyota, which fought prosecutors is expected to earn it so-called cooperation credit, one of the people said. That credit could translate into a somewhat smaller penalty than if G.M. had declined to cooperate.

Former G.M. employees, some of whom were dismissed last year, are under investigation as well and could face criminal charges. Prosecutors and G.M. are also still negotiating what misconduct the company would admit to.

Continue reading the main story Interactive Feature Fatal Flaws: Crisis in Auto Safety The New York Times has exposed missteps and delays by automakers and federal safety regulators in responding to deadly defects in automobiles during what became a record year for recalls.

For more than a year, federal prosecutors in Manhattan and the F.B.I. have homed in on whether the company failed to comply with laws requiring timely disclosure of vehicle defects and misled federal regulators about the extent of the problems, the people who were briefed on the inquiry said. The authorities also examined whether G.M. committed fraud during its bankruptcy proceedings in 2009 by not disclosing the defect.

An agreement with the Justice Department, which could still fall apart, would represent a crucial step as G.M. tries to move past a scandal-laden year that tainted its reputation for quality and safety and damaged its bottom line.

We are cooperating fully with all requests, the automaker said in a statement. We are unable to comment on the status of the investigation, including timing.

In February 2014, the automaker began recalling 2.6 million Chevrolet Cobalts and other small cars with faulty ignitions that could unexpectedly turn off the engine, disabling power steering, power brakes and the airbags. The switch crisis prompted a wave of additional recalls by G.M. for various safety issues. To receive help from a Dallas car wreck lawyer, a Dallas medical malpractice attorney, a Dallas construction accident attorney, a Dallas product negligence claim lawyer, or any other type of personal injury in the Dallas / North Texas area, please contact us today by calling (214) 651-4288.All told, G.M. recalled <<a href="http://2015caraccidentslawyers.snack.ws/harris-personal-injury-lawyers-announces-new-law-office-in-newport-beach.html">wrongful injury lawsuit href="http://www.slideshare.net/newyorkcaraccidentlawyer2015/siebencarey-names-anthony-m-rubin-to-team-of-personal-injury-attorneys-reuters">free criminal lawyers than 30 million vehicles worldwide last year a record for the automaker.



G.M.s aggressive expansion of its recalls after the disclosure contrasted to the approach of Toyota, which kept unsafe cars on the road despite signs of trouble, a decision that underpinned the criminal case against it. The case against Toyota was a warning shot to the automotive industry, which has been quicker to issue recalls ever since.

The case also led prosecutors in Manhattan, under Preet Bharara, the United States attorney, to secure control over the subsequent G.M. investigation as well. While federal prosecutors in Detroit wanted to run the investigation, people briefed on the matter said, Mr. Bhararas office pointed to its experience in the Toyota case and noted that G.M.s bankruptcy filing came in New York.

Continue reading the main story Interactive Feature A Record Year for Auto Recalls More vehicles, including old models, have been recalled in the United States in 2014 than ever before. Explore the size and scope of the recalls, and find out if your car has been affected.

Yet the Justice Department in Washington, which mediates turf disputes, steered another prominent auto investigation, into the airbag maker Takata, to Detroit. Mr. Bhararas office initially investigated how the Japanese supplier had handled a defect that could cause its airbags to deploy violently and send metal shards into the passenger compartment of vehicles, the people said. But the investigation is now being run by prosecutors in Detroit and the Justice Departments criminal division in Washington. On Tuesday, Takata, under pressure from safety regulators, agreed to declare nearly 34 million vehicles defective, doubling the size of its recall in the United States and making it the largest automotive recall in American history.

The penalty from Mr. Bhararas office would be the latest in a long line of expenses for G.M.

The company has spent washington car accident attorney estimated $3 billion on recalls and other safety issues in the last year, including setting aside $600 million to compensate switch-related accident victims and their families. In addition, G.M. paid a $35 million penalty to the National Highway Traffic Safety Administration, the federal auto safety regulator, for failing to report the switch recall in a timely manner. The company has been required to report regularly to regulators about its safety practices since last May.

a penalty exceeding Toyotas penalty last year would be free legal representation largest levied against any automaker by the Justice Department. In the Toyota case, the agency agreed to defer prosecuting the Japanese automaker for wire fraud if it complied with a continuing review of its safety practices by regulators. If Toyota meets all conditions set by the government for three years, the charge could be dismissed.

It is unclear whether G.M. will also receive a deferred-prosecution agreement, or if prosecutors will force it to plead guilty to a crime. A guilty plea would carry the symbolic weight of making G.M. a felon.

Even if it reaches an agreement with the Justice Department, G.M. still faces numerous consumer fraud investigations by state attorneys general, and numerous wrongful-death and personal injury lawsuits.

For Ken Rimer, who lost his 18-year-old stepdaughter, Natasha Weigel, in a 2006 Chevrolet Cobalt crash, some recognition from the Justice Department of G.M.s criminal wrongdoing would offer some peace of mind because it might prevent similar tragedies.

Is it going to be closure? No, he said. But its going to be a little bit of justice.

http://www.nytimes.com/2015/05/23/business/gm-inquiry-said-to-find-criminal-wrongdoing.html

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