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Toyota to pay $1.2 billion for misleading public on safety recalls

Toyota has come to a $1.2 billion settlement to end a Justice Department criminal probe into how the company handled customer complaints and automobile recalls related to safety problems with their vehicles from 2009 to 2010.

“Today we can say for certain that Toyota intentionally concealed information and misled the public about the safety issues behind these recalls,” Attorney General Eric Holder said.

Holder, along with Transportation Secretary Anthony Foxx and U.S. Attorney for the Southern District of New York Preet Bharara, announced the settlement at Justice Department headquarters in Washington on Wednesday morning.

“When car owners get behind the wheel, they have the right to expect that the automobile is safe,” said Holder. When companies become aware of a safety concern, said the attorney general said, the company must immediately tell customers of the problem.

“Toyota violated this basic compact,” he said. Instead, Holder argued the company treated a public safety issue as a “public relations problem.”

In September 2009, Toyota began recalling millions of vehicles after reports of accidents linked to the unintended acceleration problems in some of the company’s most popular model brands, including Camry, Prius and Lexus.

By settling, the world’s largest automaker may avoid criminal charges and the deal concludes a four-year investigation into whether or not Toyota properly disclosed issues related to the unexpected acceleration. Toyota said Wednesday that they hope the settlement is a “major step toward putting this unfortunate chapter behind us.”

The investigation, led by the U.S. Attorney’s office and the FBI, concluded that the manufacturer provided false or incomplete statements to the National Highway Traffic Safety Administration and to Congress.

Holder said that Toyota admitted to wrongdoing as part of the settlement. While criminal charges have been filed against the manufacturer, they are delayed while the Justice Department gives Toyota time to correct their conduct. If Toyota fails to comply with the settlement requirements, Holder says the Justice Department could still move forward with the charges.

Transportation Secretary Anthony Foxx said that he hopes the settlement will send a “powerful message to manufacturers to put safety first.”

“If this story has a legacy,” he said, “let it be that.”

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