UPDATED: 3/20/14 6:23 pm ET
NEW YORK (Bloomberg) -- Toyota Motor Corp., which agreed to pay $1.2 billion to end a criminal probe that led to the recall of more than 10 million vehicles, received approval of the deal from a U.S. judge who said the case is an example of how “corporate fraud can kill.”
The accord is the largest criminal penalty imposed on an automaker in the United States, Attorney General Eric Holder said. As part of the settlement, disclosed Wednesday by government officials, Toyota admitted wrongdoing and agreed to pay the penalty and submit to “rigorous” review by an independent monitor.
“This unfortunately is a case that demonstrates that corporate fraud can kill,” U.S. District Judge William Pauley said Thursday in federal court in Manhattan as he accepted the agreement as well as the company’s not guilty plea, which was entered as a matter of procedure. “I sincerely hope that this is not the end but rather a beginning to seek to hold those individuals responsible for making the decisions accountable.”
Pauley said the case presented a "reprehensible picture of corporate misconduct."
Toyota was charged with wire fraud, which the government agreed not to prosecute for three years as long as the company continues cooperating with authorities.
The recalls blemished Toyota’s reputation and caused it to relinquish its title as the world’s top-selling automaker for one year to General Motors, which is now facing probes into how it handled defective ignition switches blamed for at least 12 deaths.
Toyota recalled more than 10 million vehicles worldwide in 2009 and 2010 following complaints of sudden, unintended acceleration.
The company made modifications to gas pedals and floor mats that were prone to shifting around and jamming the accelerator. Toyota also installed brake override software on recalled models and began making the systems standard on new vehicles.