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Justice Department Finds GM Acted Criminally in Ignition Crisis

Motor Trend logo Motor Trend 5/23/2015 Alex Nishimoto

The U.S. Department of Justice has identified criminal wrongdoing in General Motors' failure to report the ignition defect that led to the recall of 2.6 million GM vehicles, reports The New York Times. The Justice Department is currently negotiating a settlement with GM that's expected to be larger than the $1.2 billion penaltyToyota was slapped with for its unintended acceleration recalls.

The settlement could be reached as soon as this summer, according to people briefed on the matter. So far, at least 104 deaths have been linked to the ignition switch defect. The criminal probe into GM began last year, spearheaded by the U.S. Attorney's office in New York. GM CEO Mary Barra also enlisted former U.S. Attorney Anton Valukas to lead GM's own investigation into the matter last year. The results of that internal investigation were "deeply troubling," according to Barra, and led to the firing of 15 employees tied to the ignition switch defect that went unreported for more than 10 years. Following that investigation, Barra emphasized that the report didn't expose a deliberate cover-up, but rather a "pattern of incompetence and neglect."

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The Justice Department's investigation looked into whether GM failed to comply with laws that require timely disclosure of defects, as well as if it misled regulators regarding the extent of the issue during its 2009 bankruptcy. GM's willingness to cooperate and "eagerness to resolve the solution" will likely be reflected in the penalty amount, according to the Times. That's in contrast to Toyota's refusal to admit mistakes during its recall fiasco. Still, GM is expected to be hit with a record fine. The automaker was already fined the maximum amount of $35 million by the National Highway Traffic Safety Administration last year.

UPDATE: When asked for comment on the investigation, a GM spokesman told us, "We are cooperating fully with all requests, but we are unable to comment on the status of the investigation, including timing."

Source: The New York Times


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