Toyota faces racketeering charges

• Source: Xinhua
• [10:37 March 18 2010]
• Comments

US consumers who seek civil damages against Toyota for diminished resale value of recalled vehicles are trying to add racketeering claims to the charge, Reuters reported Thursday.

Under the Racketeer Influenced and Corrupt Organisation Act, a commercial enterprise can be found liable for triple the damages for any harm caused by its fraudulent activities.

Tim Howard, lead counsel for a team of law firms handling some half the cases, said the litigation that originally stood to reap more than $2 billion from Toyota, could end up costing the Japanese automaker more than $10 billion.

The updated complaints, quoting documents and congressional testimony by Toyota executives, said the company was aware of unintended acceleration problems in its vehicles for several years, even as it continued to promote defective cars as safe and reliable.

The lawsuits assert that Toyota's concealment of defects in its vehicles while advertising them as safe constitutes criminal fraud, and falls under the definition of "racketeering activity."

However, Toyota has insisted that electronics have nothing to do with the acceleration, pointing instead to entrapment of the gas pedal by ill-fitting floor mats or sticky gas pedals themselves.

Toyota was successful in the US market with its vehicles enjoying one of the industry's highest resale values.