State and federal prosecutors are currently working to build criminal fraud cases against General Motors (GM) due to their actions in handling the ignition switch defects that have been linked to at least 54 car accidents and 13 deaths. While the federal charges mainly focus on mail and wire fraud charges, the state cases are seeking to demonstrate that the auto manufacturer violated consumer protection laws.
Currently, federal prosecutors are investigating potentially misleading statements made by GM regarding the ignition switch defects that led to a recall of millions of vehicles earlier this year. In particular, they are seeking to prove that GM officials were aware of this serious defect when they informed regulators that they had addressed the issue. Additionally, prosecutors are looking into the statements and instructions released to consumers regarding how to handle a vehicle that had lost power from the ignition switch defect.
Investigators have already released reports detailing incidents dating back nearly a decade, such as a 2005 notice to dealers, which instructed them to tell customers to remove unimportant items from key chains. GM officials consciously chose to remove the word "stall" from the notice out of fears that it would cause safety concerns among consumers. In 2007, GM officials told the NHTSA that there was "no specific problem pattern" in a series of car accidents the company already knew were associated with ignition switch defects.
If federal prosecutors move forward with a criminal case, they likely will seek to hold GM accountable for incidents occurring prior to the auto manufacturer's resolution of bankruptcy proceedings in 2009. Bankruptcy protections will not absolve GM from liability in a consumer fraud case.
Currently, at least 12 states have launched investigations into GM's activities. State investigations have been focusing more on whether GM violated state consumer fraud laws. In particular, they are being investigated for potentially committing unfair and deceptive practices such as product misrepresentation and failure to disclose a known defect to the general public.
Howard D. Silver is a Los Angeles consumer protection lawyer with more than 25 years of experience. If you have been injured in an accident caused by one of these defective GM vehicles, Mr. Silver will fight aggressively to ensure your rights are protected every step of the way.
Please contact the Law Office of Howard D. Silver today to schedule your free consumer fraud consultation. Mr. Silver serves clients in Los Angeles, Riverside, Ventura, and San Bernadino Counties, and throughout California.