Report: DOJ Mulls Criminal Charges Against GM

GM CEO GM companies used car ignition switch

The U.S. Department of Justice may be moving closer to filing criminal charges against General Motors for the automaker’s failure to recall cars with a faulty ignition switch. The Wall Street Journal reports that the DOJ is considering wire-fraud charges in the case after GM allegedly made misleading statements and concealed information about the defective switch which is now linked to more than 100 deaths.

The WSJ reports that GM CEO Mary Barra is declining to comment on the possible wire-fraud charge. “We have cooperated fully,” she said of the Justice Department probe. “It is their timeline and we are going to continue to cooperate to the fullest extent that we can. Anything else is pure speculation and does no one any good.”

There is such a precedent for charges of this nature.  U.S. prosecutors previously charged Toyota similarly for defrauding their customers by making misleading statements about their products’ safety.

It’s just one of the criminal charges GM could be facing in the case as U.S. prosecutors continue to investigate the faulty ignition switch involving mid-to-late 2000s model vehicles, a defect that we’ve learned GM knew about and concealed for years.  The issue is that the switch can move out of the “run” position to the “accessory” or “off” positions, and cause the car to lose power suddenly while in motion. This could result in a crash and also render the front air bags inoperable.

As of June 9, the number of approved death compensation claims related to the faulty switch stood at 111, compared to a total of 109 one week earlier. GM is handling claims through a special fund set up to investigate and compensate victims. It’s no longer accepting claims, but investigators continue to go through those received before the January 31, 2015 deadline.  Of the 4,342 total claims submitted, the independent attorney heading up the fund has so far found 2,357 claims ineligible, 191 are still under review and another 70 were submitted with no documentation. The remaining 1,393 submitted claims were found “deficient,” which means claimants can still submit further documentation to support their claim. GM estimates that compensating all victims of the defective car part could cost the Detroit automaker anywhere from $400-600 million.

GM expects the review of all claims to wrap up by the end of the summer.

The GM recall comprises of 2.6 million vehicles, most of those in the U.S.  It includes 2003-2007 Saturn Ions, 2007-2010 Saturn Skys, 2005-2011 Chevrolet HHRs, 2006-2010 Pontiac Solstices, and 2005-10 Chevrolet Cobalt and Pontiac G5 models.

Photo Credit: GM


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