Create a free Manufacturing.net account to continue

Report: Feds Considering Wire Fraud Charges For GM

Federal prosecutors could bring wire fraud charges against General Motors over the automaker's problems with ignition switches.

Mnet 187465 Gm 57

Federal prosecutors could bring wire fraud charges against General Motors over the automaker's problems with ignition switches.

The Wall Street Journal reported on Tuesday that the Justice Department believes GM withheld information and made misleading statements about the defective switches.

GM last year recalled 2.6 million vehicles over the switches but acknowledged it knew about the problems for more than a decade. The faulty switches can inadvertently slide into the "off" position and disable critical safety features such as power steering and airbags.

The defect is linked to more than 100 deaths and more than 200 injuries.

The Journal report cited sources who indicated that the DOJ hopes to reach a settlement with GM over the switches later this year. Prosecutors have not determined which charges to file, if any, and further investigations into other potential criminal activity could occur.

Federal prosecutors previously charged Toyota with wire fraud over withheld information about vehicle safety issues, but the charge will be dismissed if the Japanese automaker complies with the rest of the settlement, which included an unprecedented penalty of $1.2 billion.

GM CEO Mary Barra said at the company's annual meeting this week that she met with federal investigators last year but declined to comment on potential charges.

"We have cooperated fully. We continue to do so," Barra said. "It is their timeline. Anything else is pure speculation and does no one any good."

A consolidated class-action lawsuit in New York federal court, meanwhile, could uncover additional information about GM's actions regarding the ignition switch issue.