Judge Approves Toyota’s $1.2 Billion Recall Settlement

A federal district judge in New York City has accepted Toyota Motor Corp.'s agreement to settle a corporate fraud probe into the company's attempt to hide safety defects, calling the case one that shows "corporate fraud can kill."

The $1.2 billion settlement allows Toyota to sidestep U.S. Dept. of Justice charges of wire fraud. But the company admits it deliberately misled consumers, hid facts from safety agencies and lied to Congress about defects that caused its vehicles to accelerate unexpectedly.

The Justice Dept. has agreed not to prosecute Toyota for three years if the company agrees to cooperate with the department. Toyota also has agreed to allow a "rigorous" review of its safety communications procedures by an independent watchdog.

In spite of its efforts to hide its product problems, Toyota ended up recalling some 10 million vehicles in 2009-2010. It also paid $1.6 billion to settle lawsuits from owners who claimed the recalls and related publicity eroded the resale value of their vehicles.

On Monday Toyota said it had reached a preliminary deal for an undisclosed amount to settle 131 personal injury and wrongful death lawsuits linked to the recalls. More than 170 additional cases remain.