3 Takata workers indicted, accused of hiding air bag defects

DETROIT - A federal grand jury in Detroit has indicted three former employees of Takata, charging them with concealing deadly defects in the Japanese company’s automotive air bag inflators.

The indictments on six counts of conspiracy and wire fraud were returned Dec. 7 and unsealed Friday, just hours ahead of a Justice Department news conference to announce a corporate penalty against the Japanese company.

The charges were filed against Shinichi Tanaka, Hideo Nakajima and Tsuneo Chikaraishi. All three were long-time executives at Takata until 2015, and all three worked both in Japan and the U.S. Takata’s U.S. operations are headquartered in the Detroit suburb of Auburn Hills, Michigan.

The trio deceived car makers who purchased the inflators “through false and fraudulent reports and other information that concealed the true condition of the inflators,” according to the indictment. It alleges that the men knew back in 2000 that the inflators were not performing to specifications and had ruptured during testing.

Each was charged with one count of conspiracy to commit wire fraud and five counts of wire fraud for transfers of funds that occurred between 2012 and 2015.

Takata air bag inflators can explode with too much force, spewing metal shrapnel into drivers and passengers. At least 16 people have been killed worldwide and more than 180 injured. The faulty inflators have touched off the largest automotive recall in U.S. history involving 42 million vehicles and 69 million inflators. 

The recall has affected at least 18 car brands, from Ford to BMW to Toyota.

“Defendants commonly referred to the removal or alteration of unfavorable test data that was to be provided to Takata customers as ‘XX-ing’ the data,” the indictment says. In February 2005, Tanaka told the others in an email that “they had ‘no choice’ but to provide manipulated data intended for distribution” to a particular automaker, the indictment stated.

In June 2005, Nakajima said in an email that “they had no choice but to manipulate test data, and that they needed to ‘cross the bridge together.’”

Multiple news outlets have reported that Takata will pay around a $1 billion penalty. The FBI has been investigating allegations that the company deceived federal regulators and tried to cover up the air bag problems.

Takata said it would phase out bag inflators powered by ammonium nitrate, whose flaws are at the center of the problem, by 2018. It plans to develop a replacement model that solves the safety weaknesses.

The U.S. National Highway Traffic Safety Administration fined Takata $70 million over the air bag defects, with as much as $130 million in extra penalties if it doesn’t meet safety measures agreed upon in a consent order.