In the past, if an automaker did something wrong, they were usually prosecuted by the US government through something called the TREAD Act. Short for Transportation Recall Enhancement, Accountability and Documentation Act, it basically requires automakers to report recalls in other countries, along with any and all serious injuries or deaths, to the National Highway Traffic Safety Administration.

Failing to report or attempting to conceal anything when there's been a death or serious injury constitutes a criminal liability. The idea is that this setup puts the onus on manufacturers to keep NHTSA apprised of safety related issues before they become a problem in the US, thereby allowing the regulator to better protect consumers.

In theory, it sounds like a relatively airtight set of rules for dealing with misbehaving automakers. That didn't stop the US Department of Justice from ignoring TREAD in its prosecution of Toyota's handling of the unintended acceleration recall, though. The result of this new approach, which charged Toyota with wire fraud, was a $1.2 billion settlement. Now, the wire-fraud approach could be used for the expected case between the US government and General Motors, based on the statements of Attorney General Eric Holder, who specifically mentioned "similarly situated companies" when discussing Toyota.

In order to make wire fraud stick, US prosecutors would need to prove criminal intent. As explained by Reuters, that means there needs to be evidence that GM actively misled either regulators like NHTSA, or the general public, all in a bid to maintain sales. In Toyota's case, it admitted to misleading both consumers and regulators.

Considering GM's rather tenuous position in regards to the recall, we don't think prosecutors will have much trouble. Whether GM comes out and admits to any deception, though, remains an open question. Of course, if anything new develops in this case, we'll be sure to let you know.


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  • 18 Comments
      waetherman
      • 9 Months Ago
      How about charging the people involved in the cover up with actual felonies instead of "charging" the company, which at most gets a fine? I bet you there' d be a lot more accountability if the CEO and others in the company were looking at 20 years in prison for each count of contributing to someone's death...
        free_spirit
        • 9 Months Ago
        @waetherman
        so why in TMC case they charged the company and why you want them now to charge just the people this is not fair
      Wisdom Seeker
      • 9 Months Ago
      When you're buying votes you can never have too much money.
      Rex Seven
      • 9 Months Ago
      I wish Eric Holder would get hit by a bus. electric if he prefers.
        The Other Bob
        • 9 Months Ago
        @Rex Seven
        I wish the parents of a--holes like you wouldn't let you on the internet.
      sfdjwk
      • 9 Months Ago
      It's interesting to bring up TREAD. But, another point to bring up, when GM restructured themselves after 2008, they basically included a statement saying that any defects in any of the product models they sold before 2009 would not be liable on their part. I wonder how this will play out in the long run. Obviously, the handling of this recall is so poor it's embarassing for anyone to claim that they would want to be affiliated with GM. And now, to throw Barra under the bus after Akerson ran away.....
      Rex Seven
      • 9 Months Ago
      At least we'll find out if GM was racist in how it installed these faulty parts! Thanks Eric.
      Byron
      • 9 Months Ago
      How long did it take Ford to correct their Bronco and Explorer flip over problem that started in 1983. Mississippi jury just gave a $131 million verdict in Explorer death. Looks like no company is innocent. Ford is still dealing with their cruse control fires.
        fran
        • 9 Months Ago
        @Byron
        Now that you brought this argument up, let me tell you that the number one most reliable and the strongest and most successful American automaker outside America is Ford for a reason. I visited many countries in Europe and everywhere I see (especially in the UK and Germany) are Fords. I even heard from people who drive there saying "Ford sells more than Toyota or any other brands that are number one in the world. Their build quality compared to Chevys are far more better." Travelled much of Asia and middle-east (yes I travel a lot due to work), same story. Just saying..
      Roger Smith
      • 9 Months Ago
      Great and we're is the other guy that resign?,he got tired of cover GM and tried to hurt Tesle?,there is a state that GM itself tried to block the sales of the Model S and thank god is coming to the light many bad news and cover up from them,they need to kill Chevrolet at least Oldsmobile doesn't got a bad reputation when they kill it,Hummer wasn't that bad,Saturn just start selling Opels and Saab was out of technology but they stole a lot from them ,leave Corvette as a brand,leave Buick in chine,bring Opel to USA,stay with GMC furor trucks,Cadillac is doing alright for now and bring back Oldmobile as a brand again
      jimclaro
      • 9 Months Ago
      JohnM, you have no idea what you are talking about. I drove in a Prius that auto-accelerated WITHOUT my foot on either the brake or gas pedal. Also, a friend of ours Lexus RX350 accelerated across a parking lot, again WITHOUT her foot on either pedal. I will never drive any Toyota vehicle again after that. It's not worth the risk.
      illusionstool
      • 9 Months Ago
      Infosys an Indian visa processing company was found guilty of visa fraud and paid the largest fine ever levied of 34 million dollars, but did not plead guilty to any charges; they are still in business today. The government wants money, but seems to look the other way if paid enough and at the same time Toyota from all the engineering and DOT reports sounds like they are getting a bum deal? Now let’s see how government motors makes out?
        fran
        • 9 Months Ago
        @illusionstool
        Umm.. Infosys is one of the leading IT solutions company in India. I visit India frequently for work and even had a meeting in that company so I know.
      churchmotor
      • 9 Months Ago
      I'm sure the NLRB and the UAW will be funding some under the table perks for Eric Holder.
      Tiberius1701
      • 9 Months Ago
      That is a bit harsh, Holder is a tool, but wishing him to be hit by a bus???
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