March 01, 2017

Takata Pleads Guilty To Wire Fraud In Air Bag Defects


Takata, Japanese automobile parts manufacturer company, pleaded guilty to wire fraud arising out of air bag defects that killed 16 people. Takata was sentenced to pay a fine of $1 billion, victim compensation, and compensation to the auto manufacturers for recall and replacement.

Judge George Caram Steeh of the US District Court for the Eastern District of Michigan accepted the guilty plea, in which Takata admitted that it carried out a fraud scheme from 2000 to 2015 by "providing false and manipulated airbag test data" that made airbags appear to perform better than they really did.

Takata admitted that executives withheld the truth about the test data from customers even after airbags began rupturing and causing injuries with expelled shrapnel. In January 2017, the company and the US Department of Justice agreed to this fine and the terms of the plea.

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