Federal prosecutors are closing in on criminal charges against General Motors Co. over a faulty ignition switch linked to more than 100 deaths, but they are still weighing whether to charge individual employees, according to people familiar with the matter.

The Manhattan U.S. attorney’s office has determined GM likely broke the law by making misstatements about the ignition-switch glitch in older Chevrolet Cobalts and other cars for more than a decade and will likely extract a fine exceeding $1 billion from the company, the...