After being charged by federal investigators with one count of wire fraud and one count of scheming to conceal safety information about a faulty ignition switch, General Motors Co. (GM) has reached a $900 million settlement with the Department of Justice.
Through deferred prosecution, the auto maker will simply have to pay the fine, agree to federal oversight for three years and hire an independent monitor for safety recalls. If the company cooperates with all levels of the agreement, all charges will be dropped at the end of the three-year period.
The company has also reached a settlement in a class action lawsuit that involved 1,400 victims of the faulty ignition switch and other recall issues. Together, both settlements total $575 million.
The company has also paid out in other matters surrounding the defective product. Last year, the company paid a $35 million fine to the National Highway Traffic Safety Administration for its failure to report the faulty switch, which the automaker knew about for more than a decade. That fine was the maximum amount allowed by law.
The company also set up a $625 million compensation fund for victims and their families. The fund concluded that of the more than 4,000 claims it received, only 124 deaths and 275 injuries were tied to the defect.
Although GM CEO Mary Barra has stated that GM accepts total responsibility for the faulty ignition switch, many families and critics of the deal feel it does not go far enough to hold the automaker accountable.
No individuals have been charged in the case. The criminal settlement is also 25 percent less than the amount Toyota Motor Corp. paid last year for similar charges.
The attorneys at The Eichholz Law Firm believe negligent companies should be held accountable for the harm they cause to consumers. If you have been injured by a defective product, contact our Georgia offices today to discuss your legal options.
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