GM ignition switch investigation results in settlement

NEW YORK – Federal prosecutors have reached an agreement with General Motors to resolve a criminal investigation into how the Detroit automaker broke the law by concealing a deadly problem with small-car ignition switches, three people briefed on the case said Wednesday.

Under the deal, GM will pay a fine of around $900 million in a deferred prosecution agreement on a wire fraud charge. That means any charges would be dismissed if GM complies with oversight and other terms for three years, said one of the people.

A spokeswoman for Manhattan U.S. Attorney Preet Bharara wouldn’t comment on the case, nor would GM spokesman Patrick Morrissey.

Last year GM recalled 2.6 million older small cars worldwide such as the Chevrolet Cobalt and Saturn Ion to replace the faulty switches, which can unexpectedly slip out of the run position to off or accessory. That shuts off the engine and disables power-assisted steering, power brakes and the air bags.

The problem caused crashes that killed at least 124 people and injured 275 more, according to lawyers in charge of a fund set up by GM to compensate victims. Families of those who died will get at least $1 million. GM has set aside $625 million to compensate people, and also faces multiple lawsuits from the problem.