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GM Settles Ignition Switch Criminal Investigation for $900 Million

GM ignition switch recallAfter a year a half, General Motors (GM) and the U.S. Department of Justice have finally settled a criminal investigation into the automaker’s defective ignition switch.

GM has agreed to pay $900 million and defer prosecution for three years on one count of wire fraud and one count of engaging in a scheme to conceal a deadly safety defect. GM has one week to pay the fee and must then submit to independent monitoring of future recalls to ensure they are adhering to federal guidelines.

GM set aside $4 billion to cover the costs of its recalls. The company has already paid a $35 million penalty for failing to disclose the defect to regulators. About $625 million was set aside for the company’s compensation fund as well.

Last month, GM revealed that it had accepted 124 death claims as well as 275 injury claims. The company has not revealed how much of the $625 million will be used for the claims, but did say that families who filed a death claim would receive at least $1 million.

GM has also revealed it struck a deal to settle a class action lawsuit involving 1,400 cases from those who suffered injuries or whose loved ones died in defective GM vehicles.

If GM complies with all the terms of the federal deal, after three years, the charges and case will be dropped.

The Justice Department has opted to not file charges against any individual GM employees. Families who lost a loved one due to the ignition switch defect are not happy with the department’s decision. The government’s investigation revealed that GM knew about the defective ignition switch for nearly a decade, and that many employees knew about safety issues with the switch.

Have you or someone you love been hurt by a defective product? The product liability attorneys at Schmidt Kramer offer free legal consultations and can help you determine your legal options.

For a free claim review, call (717) 888-8888 or fill out a contact form.