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Takata Corporation To Pay $1B Over Airbag Fraud

By Monica U Santos , Jan 14, 2017 03:30 AM EST
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Car owners may need to repair Takata air bags more than once
Takata to pay $1 billion over its air bag fraud and at least 3 executives criminally charged. (Photo : Takata Racing/YouTube Screenshot)

Takata, one of the Japanese air bag manufacturers, has reached a $1 billion settlement with the U.S. Justice Department due to air bag fraud that led to a massive recall.

Takata Corporation To Pay $1B Over Air Bag Fraud

According to NPR, at least 16 confirmed deaths have been linked to the defect and 11 of them is in the U.S. As part of the deal, Takata agreed to plead guilty to the crime offense of wire fraud. On Friday, U.S. Attorney Barbara McQuade announced that Takata Corp. has agreed to plead guilty to wire fraud and pay $1 billion in criminal penalties stemming from the company’s fraudulent conduct related to sales of defective air bag inflators.

“Automotive suppliers who sell products that are supposed to protect consumers from injury or death must put safety ahead of profits,” McQuade said as per The Detroit News. “If they choose instead to engage in fraud, we will hold accountable the individuals and business entities who are responsible.”

Of the total of $1 billion, the $25 million will be funded as a fine to the U.S. government and the $125 million will be used for the compensation to all the people who are physically injured by the mislead air bags. The remaining money from the $1B will go to automakers that were defrauded by Takata, this is to cover the cost of replacing recalled parts.

Three Executives Criminally Charged

Three high-level executives from Takata Corp. were also indicted on wire fraud and conspiracy charges, McQuade confirms it at a news conference in Detroit to announce the settlement. The 3 Japanese executives are Shinichi Tanaka, Hideo Nakajima, and Tsuneo Chikaraishi. They are all allegedly concealed deadly defects in the inflator inside the Takata's air bags.

In the emails, the 3 executives are allegedly referred to submitting false reports of test data to all the automakers that were using their products, specifically the air bags, even after initial reports that the inflators were failing and injuring people.

"Corporations and individuals who cheat will be held accountable," McQuade said. "Cheaters will not be allowed to gain an advantage over those who play by the rules."

 

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