Source: United States Department of Justice
The U.S. Justice Department, Environmental Protection Agency (EPA), FBI, Customs and Border Protection (CBP), Department of Transportation’s Office of Inspector General (DOT-OIG), National Highway Traffic Safety Administration (NHTSA), and State of California today reached criminal and multiple civil resolutions, valued at over $1.6 billion, with Hino Motors, Ltd. (Hino Motors), Hino Motors Manufacturing U.S.A., Inc. and Hino Motors Sales U.S.A., Inc. (collectively, Hino) for violations related to the submission of false and fraudulent engine emission testing and fuel consumption data to regulators and the illicit smuggling of engines into the United States. These resolutions are subject to approval by the U.S. District Court for the Eastern District of Michigan.
This unlawful conduct allowed Hino, a subsidiary of Toyota Motor Corporation, to improperly secure approvals to import and sell, and cause to be imported and sold, more than 110,000 diesel engines in the United States from 2010 to 2022. These engines were primarily installed in heavy-duty trucks manufactured and sold by Hino nationwide.
“Today, Hino Motors, a subsidiary of Toyota, agreed to plead guilty to engaging in a criminal conspiracy to mislead regulators and consumers that violated federal environmental laws and endangered public health,” said Attorney General Merrick B. Garland. “No company is above the law. I am grateful to our federal and state partners for their work to hold Hino accountable for its criminal misconduct.”
“Hino knew the requirements that engines must meet to be certified to operate in the United States, yet it falsified data for years to skirt regulations,” said Assistant Attorney General Todd Kim of the Justice Department’s Environment and Natural Resources Division (ENRD). “Hino’s actions led to vast amounts of excess air pollution and were an egregious violation of our nation’s environmental, consumer protection and import laws. Today’s plea agreement and civil settlements, on behalf of myriad federal entities, mark the Justice Department’s commitment to protecting our environment and holding companies accountable for corporate wrongdoing.”
“Corporate crimes such as these endanger the health and well-being of innocent Americans, as well as the environment in which we all live,” said U.S. Attorney Dawn N. Ison for the Eastern District of Michigan. “My office is committed to aggressively seeking justice when corporate actors violate air quality standards and place our community at risk in order to increase their sales.”
“Hino Motors engaged in a years-long scheme to alter and fabricate emissions data in order to get a leg up over its competitors and boost their bottom-line,” said FBI Director Christopher Wray. “To further this fraudulent scheme, Hino violated laws and regulations intended to protect American’s health and the environment. The FBI is committed to working with our partners across the U.S. government to ensure that corporate bad actors who purposefully violate the law are held accountable for their criminal actions.”
“Providing false information to federal agencies subverts regulations designed to protect the public and reduce costs for consumers,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “The Justice Department will continue to work closely with its partners to hold accountable companies that prioritize profit over complying with the law.”
“EPA and the American consumer rely on true and accurate data from engine manufacturers to protect our nation’s air quality. Hino’s actions directly undermined EPA’s program to protect the public from air pollution,” said Acting EPA Administrator Jane Nishida. “Today’s criminal charges and civil settlement demonstrates EPA’s commitment to hold companies like Hino Motors, Ltd. accountable for knowingly violating environmental laws and regulations that protect public health and the environment.”
“CBP works with partner government agencies to prioritize the enforcement of environmental laws and is driving meaningful change in trade practices,” said Executive Assistant Commissioner AnnMarie Highsmith of CBP’s Office of Trade. “This settlement is an example of CBP’s role in enforcing laws that facilitate legitimate trade and protect the American economy, creating a level playing field for American businesses and ensuring that consumers have access to fair, safe products.”
“Misleading federal regulators is a brazen crime that is reflected in the size and scope of today’s settlement agreement which holds Hino Motors accountable for their wrongdoing,” said Inspector General Eric J. Soskin of DOT. “The judicial actions taken today demonstrate the ongoing commitment of DOT-OIG to work with our law enforcement and prosecutorial partners to investigate improper and illegal conduct of automotive corporations that submit false fuel consumption values.”
“Hino knowingly took unlawful advantage of California’s incentives designed to accelerate the adoption of clean transportation technologies, which safeguard the health and safety of Californians from pollution,” said California Attorney General Rob Bonta. “At the California Department of Justice, we will continue to hold manufacturers like Hino accountable for breaking California’s laws. I want to thank our federal and state partners for their collective work on reaching this critical settlement.”
Global Resolution Details
As part of the global resolutions, Hino Motors, Ltd. has agreed to plead guilty to engaging in a multi-year criminal conspiracy. The plea agreement, which is subject to approval by the court, requires it to pay a criminal fine of $521.76 million, serve a five-year term of probation — during which it will be prohibited from importing any diesel engines it has manufactured into the United States — and implement a comprehensive compliance and ethics program and reporting structure. Hino Motors, Ltd. has also agreed to entry of a forfeiture money judgment against it in the amount of $1.087 billion. Pursuant to the plea agreement, Hino’s future payments towards its civil settlement obligations, as well future payments as part of a civil class action settlement brought by private plaintiffs, will be credited towards its criminal forfeiture money judgment obligation.
In separate civil resolutions of environmental, customs and fuel economy claims by the federal government and the State of California, Hino will pay a civil penalty of $525 million based on its demonstrated financial condition. The global resolution includes the second largest criminal fine and fourth largest civil penalty in the history of EPA’s mobile source program.
Other provisions of the civil agreement include:
- A mitigation program, valued at $155 million, to offset excess air emissions from the violations by replacing marine and locomotive engines, and installing locomotive idle reduction technology systems, throughout 49 states (excluding California), including the reduction of over 41,000 tons of nitrogen oxides (NOx) emissions;
- A recall program, valued at $144.2 million, to modify violative engines in 2017-2019 heavy-duty trucks so they comply with U.S. and California emissions laws;
- $123.6 million to fund mitigation projects and enforcement costs in California; and
- $30.3 million to resolve California False Claims Act claims.
EPA discovered Hino’s noncompliance as a result of conducting confirmatory testing of Hino’s engines. On Jan. 10, EPA voided engine approvals, called “certificates of conformity,” for Hino’s 2010-2019 diesel engines for heavy-duty trucks and nonroad equipment. This is the largest voiding action ever taken by EPA, reflecting the egregiousness of the conduct and the flagrant disregard for EPA’s certification program. That program is designed to provide a level playing field for vehicle and engine manufacturers seeking to do business in the United States.
Conduct Admitted to by Hino Motors, Ltd.
As part of its plea agreement, Hino Motors, Ltd. admits that between 2010 and 2019, it submitted and caused to be submitted false applications for engine certification approvals. Hino Motors, Ltd. engineers regularly altered emission test data, conducted tests improperly and fabricated data without conducting any underlying tests. Hino Motors, Ltd. further admits that it submitted fraudulent carbon dioxide emissions test data, which resulted in false fuel consumption values being calculated for its engines. Hino Motors, Ltd. engineers also failed to disclose software functions that could adversely affect engines’ emission control systems. As a result of the fraud, Hino Motors, Ltd. imported and sold over 105,000 non-conforming engines between 2010 and 2022.
Emissions Reductions
EPA estimates that Hino’s engines emitted levels of NOx, particulate matter, carbon dioxide (CO2), and nitrous oxide (N2O) above the regulatory limits. Hino’s recall is designed to bring model year 2017-2019 truck engines into compliance with emissions standards. Its mitigation projects around the country will fully offset the lifetime excess emissions of all violative engines. These mitigation projects include:
- Replacing more than 35 older, dirtier marine and locomotive engines with engines certified to the strictest EPA diesel emission standards, and
- Installing idle reduction technology in over 135 locomotives.
The mitigation projects will reduce emissions by at least 41,941 tons of NOx, 376 tons of particulate matter, 6,199 tons of CO2, and 135 tons of N2O. The NOx reductions alone are estimated to be equivalent to removing over 110,000 heavy-duty trucks from operation.
NOx and particulate matter are associated with serious health effects, including asthma attacks, respiratory illnesses and cardiovascular issues, which can lead to lung damage and premature death. CO2 and N2O are climate-impacting greenhouse gases, which can also endanger public health and welfare.
The Clean Air Act requires vehicle and engine manufacturers to submit testing data showing that their products meet air pollution emission standards in order to obtain certifications from EPA and California. As part of the certification process, manufacturers must conduct emission testing and submit test data demonstrating compliance with standards. Manufacturers must also disclose software functions that could affect engines’ emission controls. Further, motor vehicle engines must comply with emissions requirements to be lawfully imported into the United States. NHTSA regulations require that manufacturers like Hino provide fuel consumption values for each model year because these standards are designed to conserve fuel and increase efficiency.
The charges in the criminal information filed against Hino Motors, Ltd. are merely accusations. All defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law. A plea hearing date has not yet been set. Future case updates will be listed at www.justice.gov/enrd/environmental-crime-victim-assistance/current-case-information-crime-victims. Individuals can contact the Justice Department regarding victim rights and services or the status of this case at (833) 676-181 or at crimevictimprogram.enrd@usdoj.gov; please mention or put in the subject line: 198-01902. The Justice Department uses the Victim Notification System (VNS) to provide victims with case information and updates related to this case. If you believe you are a victim of the conduct described in the plea agreement and criminal information, please visit www.justice.gov/enrd/case/hino-motors-ltd.
The proposed global civil settlement consent decree is subject to a 30-day comment period and final court approval. More information on the consent decree and the process for submitting comments is available at www.justice.gov/enrd/consent-decrees. This settlement agreement is part of a coordinated group of settlements resolved by the United States against Hino by EPA, NHTSA, CBP, and California with resolved False Claims Act and other state-only claims on behalf of the California Air Resources Board (CARB) and the California Attorney General.
Special agents of EPA’s Criminal Investigation Division (EPA-CID)’s Ann Arbor Field Office and FBI’s Detroit Field Office are investigating the criminal case.
Senior Trial Attorney Banumathi Rangarajan of ENRD’s Environmental Crimes Section and Assistant U.S. Attorney Andrew J. Yahkind for the Eastern District of Michigan are prosecuting the criminal case, with support from EPA’s Regional Criminal Enforcement Counsel. The Civil Division’s Consumer Protection Branch, Justice Department’s Office of International Affairs, CBP’s Office of Chief Counsel and Office of the Assistant Chief Counsel-Detroit, DOT-OIG and NHTSA provided assistance.
Senior Counsel David Laufman Weigert and Senior Attorney Alexandra Sherertz with ENRD’s Environmental Enforcement Section, Assistant U.S. Attorney Anthony Gentner of the U.S. Attorney’s Office for the Eastern District of Michigan and Senior Legal Advisor Meetu Kaul and Attorney-Advisors Kayla Steinberg and Ian Altendorfer with EPA’s Office of Enforcement and Compliance Assurance (OECA), Air Enforcement Division are handling the civil settlements. Engineers with EPA’s Office of Transportation and Air Quality and OECA provided critical assistance.
CARB played an active and supportive role throughout the development and pursuit of the civil case and settlement negotiations by EPA and ENRD. Trial Attorneys Marilee Miller and Paulina Stamatelos with the Civil Division’s Consumer Protection Branch are handling NHTSA-related claims. Assistant Chief Counsel Karen Hiyama and Attorney Jason W. Williams with CBP’s Office of the Assistant Chief Counsel-Detroit are handling CBP-related claims.