Federal prosecutors are set to announce a settlement with General Motors that resolves a criminal investigation into how the Detroit automaker concealed a deadly problem with small-car ignition switches, according to three people briefed on the case.
Under the deal, GM will pay a fine of around $900 million in a deferred prosecution agreement on a wire fraud charge. That means any charges would be dismissed if GM complies with oversight and other terms for three years, said one of the people. All of the people asked not to be identified because the agreement isn't scheduled to be formally announced until later Thursday.
A spokeswoman for Manhattan U.S. Attorney Preet Bharara wouldn't comment on the case, nor would GM spokesman Patrick Morrissey. The deal was first reported Wednesday by the Wall Street Journal.
Last year GM recalled 2.6 million older small cars worldwide such as the Chevrolet Cobalt and Saturn Ion to replace the faulty switches, which can unexpectedly slip out of the run position to off or accessory. That shuts off the engine and disables power-assisted steering, power brakes and the air bags.
The problem caused crashes that killed at least 124 people and injured 275 more, according to lawyers in charge of a fund set up by GM to compensate victims. Families of those who died will get at least $1 million. GM has set aside $625 million to compensate people who accept a settlement with the fund. GM also faces multiple lawsuits related to the problem.
The company acknowledged that some of its employees knew about the problem for more than a decade, but no cars were recalled until early last year. GM hired former federal prosecutor Anton Valukas to investigate the matter, and he found no wrongdoing on the part of top executives. Instead, he blamed the problem on a bureaucratic corporate culture that hid problems and failed to take action.