Toyota Subsidiary Order To Pay Over $1.6B In Penalties For Emissions Fraud Scheme
U.S. District Court Judge Mark A. Goldsmith of the Eastern District of Michigan on Wednesday accepted Hino Motors, Ltd.'s guilty plea to a single criminal charge for engaging in a multi-year conspiracy to defraud the U.S. government and consumers, as well as smuggling non-compliant goods into the country.
The court sentenced Hino, a subsidiary of Toyota Motor Corp. (NYSE:TM), to pay a $521.76 million criminal fine, serve five years of probation--during which it is barred from importing diesel engines it manufactures into the U.S.--and implement a compliance and ethics program with reporting requirements.
The court also imposed a $1.087 billion forfeiture money judgment against the company.
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Between 2010 and 2019, Hino engineers falsified emissions test data submitted to the Environmental Protection Agency for engine certification approvals under the Clean Air Act. They manipulated emissions testing procedures, fabricated data without conducting tests and failed to disclose software functions that negatively affected emission control systems.
Hino Motors' fraudulent activity led to over 105,000 non-compliant diesel engines being imported and sold in the U.S., primarily installed in heavy-duty trucks
"By pleading guilty, Hino Motors, Ltd. has admitted to orchestrating a deliberate and years-long fraud scheme that put profit over principle," said Acting Assistant Director James C. Barnacle Jr. of the FBI's Criminal Investigative Division.
"It doesn't matter how complex the scheme is, the FBI is committed to holding individuals and organizations responsible for their actions," Barnacle said.
Man Charged With Repeated Investment Policy Violations, Misconduct Resulting In Losses Of $1.6 Million
The SEC on Monday filed charges against David Yow Shang Chiueh and his firm, Upright Financial Corp., for repeated misconduct and violations of investment policies. The charges stem from investing over 25% of Upright Growth Fund’s assets in a single company for several years, resulting in $1.6 million in losses.
Despite settling similar charges in November 2021, Chiueh and Upright allegedly continued to violate the 25% industry concentration limit and misrepresent their actions from Nov. 24, 2021, to June 23, 2024. The prolonged non-compliance led to significant financial losses for the fund and its investors.
The SEC’s complaint also alleges additional misconduct, including:
- Operating the fund’s board without the required number of independent trustees
- Misrepresenting a trustee’s independence in filings
- Withholding crucial information from the board
- Hiring an accountant without proper board approval
"As alleged, the defendants not only ran the fund contrary to its fundamental investment policies, but they actively misled investors and the fund's board about their conduct," said Corey Schuster, Chief of the Division of Enforcement's Asset Management Unit.
"Undeterred by their prior SEC settlement involving these very same issues, we allege that the defendants repeatedly violated fundamental rules designed to protect investors in mutual funds," Schuster added.
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