Former FBI director Robert Mueller has been selected U.S. District Judge George C. Steeh by a Michigan federal judge to administer the nearly $1 billion Takata Corp. has agreed to pay automakers and consumers who purchased its defective air bag inflators. Steeh is overseeing the criminal case against Takata. The automaker agreed earlier this year to refund $975 million and pay a $25 million criminal penalty as part of a settlement with the U.S. Department of Justice (DOJ).
Judge Steeh wrote in his order that after conducting “exhaustive research” and “meeting with three potential candidates,” he selected Mueller – a former FBI director and former U.S. attorney – to serve as special master for the restitution fund. Judge Steeh said that Mueller’s background suggests he is “uniquely qualified” to oversee the settlement fund. The court’s order states:
The court determines that Mr. Mueller is the best candidate for the position, based in part on the parties’ support of his appointment, as well as the court’s comfort and trust in his impeccable credentials, his relevant experience in settlement negotiations, his familiarity with the automotive industry in general, and based upon his well-known reputation for integrity.
Mueller and his team will be in charge of determining what entities and individuals should be paid out, and in what amounts, from two separate funds — $850 million for automakers, and $125 million for individual consumers. Judge Steeh wrote that Takata must pay the $850 million within five days of its sale or merger, which must occur by February 2018.
Takata’s air bag inflators have been linked to at least 11 deaths in the U.S. and caused the largest auto recall in the nation’s history. Takata has faced massive global recalls of its air bag inflators, which have a tendency to explode. In February the company pled guilty to one count of wire fraud in the Michigan federal court as part of its plea deal with prosecutors over the company’s falsifying of testing data and reports about its inflators. The settlement resolved the DOJ investigation into the company and its affiliates.
That same day, the DOJ made a superseding filing that charged Takata with the one wire fraud count it to which it agreed to plead guilty. The scheme started sometime around 2000 and ran for at least 15 years. Takata fraudulently persuaded customers to buy air bag systems by giving them false information, hiding the accurate test results for the air bag inflators. To further that plan, Takata made an interstate wire transfer of about $43,000 from Pennsylvania to Detroit, according to the DOJ.
The settlement called for the creation of the restitution funds, and also required Takata to improve its compliance program and to appoint an independent monitor who will report to the DOJ for three years about Takata’s compliance with legal and ethical obligations. A little more than a year ago, NHTSA levied a $200 million fine on Takata – its largest ever – in a deal in which the company admitted that it failed to tell the agency about the defect even though it knew about it and held important information.
NHTSA estimated at the time that the exploding inflators had caused about 98 injuries. A sprawling multidistrict litigation involving injured victims and people whose car values have decreased is pending in a Florida federal court. Takata is one of the defendants. The case is U.S. v. Takata Corp. (case number 2:16-cr-20810) in the U.S. District Court for the Eastern District of Michigan.
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