Takata Corp., one of the world’s largest suppliers of auto safety equipment, pleaded guilty to one count of wire fraud and was sentenced to pay $1 billion in criminal penalties related to the company’s sales of defective airbag inflators.
“For over a decade, Takata lied to its customers about the safety and reliability of its ammonium nitrate-based airbag inflators,” Acting Assistant Attorney General Kenneth A. Blanco said Monday. “Takata abused the trust of both its customers and the public by allowing airbag inflators to be put in vehicles knowing that the inflators did not meet the required specifications.”
After accepting Takata’s guilty plea, a federal judge sentenced Takata to pay a criminal penalty of $1 billion, including $975 million in restitution and a $25 million fine, and three years’ probation.
Two restitution funds will be established: a $125 million fund for people who have been injured by Takata’s airbags and haven’t reached a settlement with the company, and a $850 million fund for airbag recall and replacement costs for auto manufacturers who were victims of Takata’s fraud scheme.
A court-appointed manager will oversee administration of the restitution funds. Takata will also carry out internal controls, hire an independent compliance monitor for three years, and cooperate with the U.S. Justice Department’s ongoing investigation, including its investigation of individuals.
From 2000 through 2015, Takata carried out a scheme to defraud its customers and auto manufacturers by providing false and manipulated airbag inflator test data that made the performance of the company’s airbag inflators appear better than it was, according to admissions made by the company. Even after the inflators began to experience problems – including ruptures causing injuries and deaths – Takata executives continued to withhold the true and accurate inflator test information and data from their customers.