Toyota subsidiary Hino, has been hit with a fine of almost $AUD 2.55 billion ($US1.6 billion)by the U.S. Environmental Protection Agency (EPA) and the Department of Justice (DOJ)
U.S. District Court Judge Mark Goldsmith accepted Hino Motors, Ltd.’s guilty plea to one-count of criminal information, charging the company with having engaged in a “multi-year criminal conspiracy to defraud both the United States government and American consumers and illicitly smuggle goods into the country”.
Judge Goldsmith also sentenced Hino to pay a criminal fine of $AUD832 million ($US521.76 million), to serve a five-year term of probation during which it is prohibited from importing any diesel engines it has manufactured into the United States and to implement a comprehensive compliance and ethics program and reporting structure.
The court also entered a $AUD1.74 billion ($US1.087 billion) forfeiture money judgment against the company.
According to court records, between 2010 and 2019, Hino engineers submitted and caused to be submitted false applications for engine certification approvals in violation of the federal Clean Air Act.
The court found that Hino engineers regularly altered emission test data, conducted tests improperly and fabricated data without conducting any underlying tests and that the engineers also submitted fraudulent carbon dioxide emissions test data, which resulted in false fuel consumption values being calculated for its engines, and failed to disclose software functions that could adversely affect engines’ emission control systems.
As a result of the fraud, Hino imported and sold more than 105,000 non-conforming engines between 2010 and 2022 and these engines were primarily installed in heavy-duty trucks manufactured and sold by Hino across the USA.
Hino Motors CEO and president Satoshi Ogiso said the company had implemented various reforms to its internal culture, oversight, and compliance practices to prevent a similar issue from occurring in the future.
“This resolution is a significant milestone toward resolving legacy issues that we have worked hard to ensure are no longer a part of Hino’s operations or culture,” Ogiso said.
“We deeply apologise for the inconvenience caused to our customers and stakeholders,” he said.
As part of its settlement with U.S. agencies including the Environmental Protection Agency, DOJ, and California Air Resources Board, Hino must implement a mitigation program, valued at $155 million, to offset excess air emissions from the violations.
Under that program, Hino must replace marine and truck engines, install idle reduction technology systems throughout 49 US states, and reduce more than 41,000 tons of nitrogen oxide emissions, which are associated with serious health effects, including asthma attacks and respiratory illnesses, according to the DOJ.
The company must also implement a vehicle recall program, valued at $144.2 million, to modify 2017–2019 model year engines so that they comply with U.S. and California emissions laws, and pay out $123.6 million to fund mitigation projects and enforcement costs in California.
Hino must also pay $30.3 million to resolve California False Claims Act claims.
“Hino falsely certified compliance with the Clean Air Act so that it could profit off Americans by sending illegal, polluting engines into the United States,” said Acting assistant administrator Jeffrey Hall of the EPA’s Office of Enforcement and Compliance Assurance.
“ The plea and sentencing demonstrates that companies who intentionally evade our nation’s environmental laws, including by fabricating data to feign compliance with those laws, deserve punishment and will be held criminally accountable,” Hall said.
“Hino unlawfully imported more than 105,000 engines that did not comply with U.S. emissions standards and lied about what it was doing. Hino’s criminal conduct gave it an unfair business advantage over other law-abiding companies, including American companies, and generated more than $1 billion in gross proceeds,” said acting assistant attorney general, Adam Gustafson of the Justice Department’s Environment and Natural Resources Division.
“We are committed to upholding the rule of law by prosecuting fraud and enforcing our Clean Air Act emissions standards,” he said.
“By pleading guilty, Hino Motors, Ltd. has admitted to orchestrating a deliberate and years long fraud scheme that put profit over principle,” said FBI Criminal Investigative Division assistant director James Barnacle.
“It doesn’t matter how complex the scheme is, the FBI is committed to holding individuals and organizations responsible for their actions,” Barnacle added.
