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United States v. General Motors Company (“GM”)

We post this notice to advise the public of a criminal action, United States v. General Motors Company, initiated September 17, 2015, following the filing of a Notice of Intent to File an Information. The criminal action relates to a Deferred Prosecution Agreement (the “Agreement”) that General Motors Company (“GM”) has entered into with the United States Attorney’s Office for the Southern District of New York, in connection with GM’s failure to disclose, from the spring of 2012 through February 2014, to its U.S. regulator, the National Highway Traffic Safety Administration (“NHTSA”), a deadly safety defect in its vehicles, and GM’s misleading consumers about that same defect.  The defect at issue is a low-torque ignition switch installed in many of the vehicles identified below, which, under certain circumstances, may move out of the “Run” position (the “Defective Switch”).  If this movement occurs, the driver would lose the assistance of power steering and power brakes.  And if a collision occurs while the switch is in the Accessory or Off position, the vehicle’s safety airbags may fail to deploy—increasing the risk of death and serious injury in certain types of crashes in which the airbag was otherwise designed to deploy.  The model year cars which may have been equipped with the Defective Switch are the 2005, 2006, and 2007 Chevrolet Cobalt; the 2005, 2006, and 2007 Pontiac G5; the 2003, 2004, 2005, 2006, and 2007 Saturn Ion; the 2006 and 2007 Chevrolet HHR; the 2007 Saturn Sky; and the 2006 and 2007 Pontiac Solstice.

Pursuant  to  the  Agreement, which is attached below, GM has  agreed,  among  other  things,  to  (a)  waive indictment and consent to the filing of a two-count felony Information, charging GM with engaging in a scheme to conceal material facts from a Government regulator, in violation of Title 18, United States Code, Section 1001, and committing wire fraud, in violation of Title 18, United States Code, Section 1343; (b) accept responsibility by, among other things, expressly acknowledging the accuracy of a detailed Statement of Facts that is incorporated into the Agreement; (c) forfeit $900 million; (d)  refrain  from  future  criminal  conduct  and  cooperate  fully  with  the  Government;  and (e) retain a monitor to review and assess (i) the efficacy of GM’s current policies, practices, and procedures in ensuring that GM corrects prior statements and assurances concerning motor vehicle safety; (ii) the effectiveness of GM’s current policies, practices, or procedures for sharing allegations and engineering analyses associated with lawsuits and not-in-suit matters with those responsible for recall decisions; (iii) GM’s current compliance with its stated recall processes; and (iv) and assess the adequacy of GM’s current procedures for addressing known defects in certified pre-owned vehicles.  In exchange, the Government has agreed to defer prosecution on the Information for a period of three years, after which time – assuming that GM complies in all respects with the Agreement – the Government will seek to dismiss the charges.

October 29, 2015, Update—Appointment of Monitor

On October 28, 2015, Bart M. Schwartz was approved to serve as the General Motors (“GM”) Monitor on behalf of the Department of Justice. As set forth in the Deferred Prosecution Agreement, the GM Monitor will review and assess the efficacy of GM’s current policies, practices, and procedures in ensuring that GM corrects prior statements and assurances concerning motor vehicle safety; the effectiveness of GM’s current policies, practices, or procedures for sharing allegations and engineering analyses associated with lawsuits and not-in-suit matters with those responsible for recall decisions; GM’s current compliance with its stated recall processes; and the adequacy of GM’s current procedures for addressing known defects in certified pre-owned vehicles. Mr. Schwartz is the Chairman of Guidepost Solutions, a firm that provides monitoring, compliance, and risk management services. Mr. Schwartz has previously served as monitor or compliance expert for a number of companies, including Point72 Asset Management (formerly SAC Capital Advisors), Deutsche Bank A.G., DHL Express, and BP. From 1983 to 1986, Mr. Schwartz served as Chief of the Criminal Division of the U.S. Attorney’s Office for the Southern District of New York under U.S. Attorney Rudolph Giuliani.  In that post, he oversaw prosecutions related to financial and business fraud, among other types of white-collar crime.  The public can contact Mr. Schwartz at GMMonitor@guidepostsolutions.com.

December 22, 2015, Update—United States v. General Motors Company ("GM")

On December 21, 2015, the Honorable Alison J. Nathan, United States District Judge for the Southern District of New York, entered a final order forfeiting to the United States the $900 million that GM agreed to forfeit, and has already paid, pursuant to GM’s deferred prosecution agreement.

Individuals who purchased certified pre-owned vehicles in the model years specified below (the “Relevant Model Year Vehicles”) may be entitled to compensation if they have suffered a pecuniary loss as a result of the conduct alleged in the Statement of Facts (Exhibit C to the Deferred Prosecution Agreement, available via the link below).  The conduct set forth in the Statement of Facts relates to a safety defect issue involving the Relevant Model Year Vehicles.  The defect at issue is a low-torque ignition switch installed in many of the vehicles identified below, which, under certain circumstances, may move out of the “Run” position (the “Defective Switch”).  If this movement occurs, the driver would lose the assistance of power steering and power brakes.  And if a collision occurs while the switch is in the Accessory or Off position, the vehicle’s safety airbags may fail to deploy—increasing the risk of death and serious injury in certain types of crashes in which the airbag was otherwise designed to deploy.

Specifically, individuals who purchased a certified pre-owned Relevant Model Year Vehicle, and who have not otherwise received compensation for their loss, may seek compensation for that loss by filing a Petition for Remission with the Department of Justice. Before submitting a Petition for Remission, individuals should review the regulations governing remission (linked below), including in particular 28 C.F.R. § 9.8, so that they are aware of the types of harm (which must be pecuniary) that are eligible for remission.  The deadline for receipt of petitions for remission is March 21, 2016. A sample Petition for Remission is also linked below.

The Relevant Model Year Vehicles are the 2005, 2006, and 2007 Chevrolet Cobalt; the 2005, 2006, and 2007 Pontiac G5; the 2003, 2004, 2005, 2006, and 2007 Saturn Ion; the 2006 and 2007 Chevrolet HHR; the 2007 Saturn Sky; and the 2006 and 2007 Pontiac Solstice.

Remission Regulations - 28 CFR 9 Procedure (91.13 KB)
Sample Remissions Petition - GM (98.13 KB)
Exhibit C to GM DPA (1.59 MB)
GM Civil Forfeiture Complaint and Exhibits

Updated January 29, 2016

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