3 Takata Execs Face Criminal Charges Over Handling Of Deadly Airbag Defect

Image courtesy of Samuel M. Livingston

For the second time in one week federal authorities have taken the rare step of bringing criminal charges against auto industry executives for alleged wrongdoing. Today, the Justice Department announced criminal indictments against a trio of execs at auto parts maker Takata for their involvement with the shrapnel-shooting airbags that have been linked to at least 11 deaths.

The indictments come in addition to the $1 billion in criminal penalties that Takata has agreed to pay to the Justice Department to resolve allegations it mishandled the massive recall that has affected just about every car company and continues to grow in size.

The three execs, who worked in airbag design and production, named in the criminal indictments are Shinichi Tanaka, Hideo Nakajima and Tsueno Chikaraishi. They are charged with one count of conspiracy to commit wire fraud and five counts of wire fraud for their alleged conduct in connection with the above-described fraud scheme.

According to the indictment [PDF], returned by a federal grand jury in the Eastern District of Michigan, in 2000, the executives became aware of internal airbag test results that showed the airbags’ metal inflators could explode.

Despite this knowledge, the DOJ alleges that the executives, who all worked for the company in both the U.S. and Japan, falsified the results and discarded damaging information.

In one instance, the indictment claims that Nakajima allegedly notified Tanaka and others in Feb. 2004 that he was “manipulating” test data for an inflator.

The following year, another email was sent among the group noting that there was “no choice” but to give manipulated data to automakers. Another email sent by Tanaka directed a junior engineer to “XX” — the company’s word for erasing — unfavorable test data.

The indictment also claims that the three executives conspired to conceal the airbag defects from auto manufacturers even when issues began to crop up on 2008.

The three executives, who were suspended from their duties at Takata in 2015, currently reside in Japan. Justice Department officials said they would work with Japanese authorities to secure the individuals’ extradition to the U.S. The agency said it is possible other criminal charges will be filed against individuals in the future.

In addition to the indictments, Takata has agreed to plead guilty [PDF] to criminal wire fraud charges, and to pay $25 million in criminal penalties, $850 million in restitution to automakers who purchase the defective airbags, and set aside $125 million to create a victim compensation fund for victims and families of victims.

While Takata’s settlement closes the criminal aspects of Takata’s handling of the massive defect, it doesn’t address the more than 42 million vehicles from 17 automakers equipped with more than 65 million airbag inflators that are at risk of violent ruptures.

To date, National Highway Traffic Safety Administration says 12.4 million total airbag inflators have been repaired or replaced, including 6.7 million driver-side airbags and 5.7 million passenger-side airbags have been fixed.

To find out if a vehicle is affected by the recall owners are urged to enter their individual VIN on the National Highway Traffic Safety Administration’s Safercar.gov/vin database.

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