WASHINGTON: Federal authorities are investigating whether General Motors hid an ignition switch defect when it filed for bankruptcy in 2009, The New York Times reported.
The Justice Department’s investigation of the carmaker includes a probe of whether GM committed bankruptcy fraud by not disclosing the ignition problem, a person briefed on the inquiry said.
Authorities are also investigating whether GM understated the defect to federal safety regulators, the Times said.
The ignition switch problems led to the recall of 1.6 million vehicles last month.
GM has handed over documents to federal investigators in New York, the person said.
The carmaker cannot comment specifically on the Justice Department investigation, spokesman Greg Martin said in an email on Saturday. “We are cooperating fully with authorities on several fronts and we will continue to do so,” he said.
The investigation is being run by FBI agents and federal prosecutors who worked on the fraud case against Toyota that ended in a $1.2bn settlement last week.
On Wednesday, GM was hit with a lawsuit demanding that the company be held liable for allegedly concealing ignition problems before its 2009 bankruptcy.
Reuters
