Court Sentences Hino Motors Ltd., a Toyota Subsidiary, and Imposes Over $1.6B in Penalties for Emissions Fraud Scheme

Note: View plea agreement here. View criminal information here.

Today, U.S. District Court Judge Mark A. Goldsmith for the Eastern District of Michigan accepted Hino Motors, Ltd.’s guilty plea to a one-count criminal information charging it with having engaged in a multi-year criminal conspiracy to defraud both the U.S. government and American consumers and illicitly smuggle goods into the country. Judge Goldsmith also sentenced Hino, a Toyota subsidiary, to pay a criminal fine of $521.76 million, 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 implement a comprehensive compliance and ethics program and reporting structure. The court also entered a $1.087 billion forfeiture money judgment against the company.

According to court records, between 2010 and 2019, Hino Motors, Ltd. engineers submitted and caused to be submitted false applications for engine certification approvals in violation of the federal Clean Air Act. Hino Motors, Ltd. engineers regularly altered emission test data, conducted tests improperly and fabricated data without conducting any underlying tests. 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 Motors, Ltd. imported and sold over 105,000 non-conforming engines between 2010 and 2022. These engines were primarily installed in heavy-duty trucks manufactured and sold by Hino nationwide.

“Hino unlawfully imported over 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 over $1 billion in gross proceeds,” said Acting Assistant Attorney General Adam Gustafson of the Justice Department’s Environment and Natural Resources Division (ENRD). “We are committed to upholding the rule of law by prosecuting fraud and enforcing our Clean Air Act emissions standards.”

“Our office is steadfast in its commitment to holding corporate actors accountable when they lie to government regulators, illicitly smuggle goods into our county, and then fraudulently sell those goods to American consumers,” said Acting U.S. Attorney Julie Beck for the Eastern District of Michigan.

“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 for EPA’s Office of Enforcement and Compliance Assurance. “Today’s 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.”

“By pleading guilty, Hino Motors, Ltd. has admitted to orchestrating a deliberate and years-long fraud scheme that put profit over principle,” said Acting Assistant Director James C. Barnacle Jr. of the FBI’s Criminal Investigative Division “It doesn’t matter how complex the scheme is, the FBI is committed to holding individuals and organizations responsible for their actions.”

Special agents of EPA’s Criminal Investigation Division and FBI’s Detroit Field Office investigated 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 handled the criminal prosecution. Assistant U.S. Attorney Gjon Juncaj handled the criminal forfeiture matters.