Volkswagen AG formally pled guilty on March 10 in a Michigan federal court to three criminal charges. The automaker agreed to pay $4.3 billion in criminal and civil penalties as part of the agreement with the U.S. Department of Justice (DOJ). This was from the automaker’s diesel emissions cheating scandal.
During a hearing in Detroit federal court, Manfred Doess, general counsel for the German car manufacturer, entered a guilty plea to counts of conspiracy to defraud the United States, wire fraud and violations of the Clean Air Act. The settlement agreement initially reached in January was with the DOJ and the U.S. Customs and Border Protection. The agreement also contains measures to fortify the company’s compliance systems.
The company’s guilty plea is a step toward ending the emissions cheating maelstrom that started in September 2015, when the U.S. Environmental Protection Agency (EPA) and the California Air Resources Board (CARB) accused the company of using the defeat devices to evade federal emissions tests for diesel vehicles. Volkswagen admitted fault and disclosed that the software was equipped in millions of diesel vehicles worldwide, nearly 600,000 of which were sold in the United States. The defeat devices allowed the vehicles to emit more toxins into the air after they left testing labs and were out on the roads. The government hit VW and its subsidiaries with a Clean Air Act suit over the emissions cheating in January 2015.
A number of Volkswagen executives were also involved in the scheme to cheat relating to emissions. A day after VW entered into the draft agreement on Jan. 10, one executive, Oliver Schmidt, was arrested in Miami and charged with conspiring to defraud the U.S. in connection with the scandal. Schmidt was the general manager of VW’s environmental and engineering office in Michigan. It’s contended that he knew the vehicles had software installed that would recognize when the car was being tested and alter emissions output. Five others were charged with wire fraud and are still believed to be in Germany.
The case is United States of America v. D-8 Volkswagen AG (case number 2:16-cr-20394) in the U.S. District Court for the Eastern District of Michigan.
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