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Takata pleads guilty, will pay $1 billion for airbag scheme

Staff Writer |
Tokyo-based Takata Corporation pleaded guilty to one count of wire fraud and was sentenced to pay a total of $1 billion in criminal penalties stemming from the company’s conduct in relation to sales of defective airbag inflators.

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Takata pleaded guilty before U.S. District Judge George Caram Steeh of the Eastern District of Michigan to a one count criminal information charging the company with wire fraud.

After accepting Takata’s guilty plea, Judge Steeh, consistent with the terms of the plea agreement, sentenced Takata to pay a total criminal penalty of $1 billion, including $975 million in restitution and a $25 million fine, and three years’ probabtion.

Under a joint restitution order entered at the time of sentencing, two restitution funds will be established: a $125 million fund for those 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 those auto manufacturers who were victims of Takata’s fraud scheme.

A court-appointed special master will oversee administration of the restitution funds.

Takata will also implement rigorous internal controls, retain an independent compliance monitor for a term of three years and cooperate fully with the department’s ongoing investigation, including its investigation of individuals.

According to admissions made during the course of the guilty plea, from 2000 through and including 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 actually was.

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.

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