US announces $1.2 billion Toyota settlement

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The U.S. has reached a $1.2 billion settlement with Toyota Motor Corp. and filed a criminal charge alleging the Japanese automaker defrauded consumers by issuing misleading statements about safety issues in Toyota and Lexus vehicles.

Under the agreement, announced Wednesday by U.S. Attorney General Eric Holder, the company will admit that it misled U.S. consumers by making deceptive statements about two safety issues affecting its vehicles. As a result, Toyota will pay a $1.2 billion financial penalty under a "deferred prosecution agreement."

It is the largest penalty of its kind imposed on an automotive company by the U.S., Holder said.

Holder says Toyota confronted a public safety issue as if it were simply a public relations problem.

"They mounted this cover up despite widely documented incidents, even tragic accidents, like the one that took the lives of an off duty California Highway Patrol officer and members of his family," said Holder.

With contributions from KPCC Staff

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