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Takata to Pay $1 Billion for Concealing Air Bag Defect

Takata Corporation will pay $1 billion dollars in criminal penalties for concealing the deadly defect in its airbag inflators. At least 11 deaths have been tied to the faulty Takata airbags in the United States.

Takata and three company executives agreed to plead guilty to wire fraud charges stemming from the company’s fraudulent conduct in relation to sales of defective airbag inflators. According to the Department of Justice, Takata knew that certain ammonium nitrate-based inflators were not performing to auto makers’ specifications. They also knew that some sustained failures, including ruptures, during testing. Nevertheless, Takata induced its customers to purchase these airbag systems by submitting false and fraudulent reports that concealed the true condition of the inflators.

Prosecutors further alleged that several key Takata executives routinely discussed the falsification of test reports being provided to Takata’s customers in email and in verbal communications. “Even after the inflators began to experience repeated problems in the field – including ruptures causing injuries and deaths – Takata executives continued to withhold the true and accurate inflator test information and data from their customers,” the DOJ maintained.

Takata will pay $975 million in restitution and a $25 million fine. Two restitution funds will be established: a $125 million fund for individuals who have been physically injured by Takata’s airbags and who have not already reached a settlement with the company, and a $850 million fund for airbag recall and replacement costs incurred by auto manufacturers who were victims of Takata’s fraud scheme.

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

If you or someone you care about has suffered serious harm due to a dangerous or defective motor vehicle, don’t hesitate to contact a San Diego injury lawyer at the Law Offices of Robert Vaage for a free consultation.