News - Volkswagen
Dieselgate: VW fined $US4.3b in criminal, civil penalties
Exec arrested, others charged as US throws book at VW over diesel emissions scandal
12 Jan 2017
THE United States Department of Justice has thrown the book at Volkswagen AG for charges relating to cheating diesel emissions tests and obstructing investigations into the scandal, with the embattled German company agreeing to plead guilty and pay $US4.3 billion ($A5.8b) in criminal and civil penalties.
Six VW employees have been charged for their roles in the conspiracy, with former US-based environmental and engineering general manager Oliver Schmidt arrested last weekend in an FBI swoop while on holiday in Miami.
VW has promised to fully cooperate with the ongoing emissions investigation that could lead to more employees being charged and will undergo a three-year probation period under which it has agreed to appoint an independent corporate compliance monitor to oversee its activities.
The criminal charges against VW – for which it has agreed to pay $US2.8b ($A3.76b) in penalties – include participating in an almost 10-year conspiracy to “defraud the United States and VW’s US customers and to violate the Clean Air Act by lying and misleading the EPA and US customers about whether certain VW, Audi and Porsche branded diesel vehicles complied with U.S. emissions standards”.
VW is also charged with “obstruction of justice for destroying documents related to the scheme, and with a separate crime of importing these cars into the US by means of false statements about the vehicles’ compliance with emissions limits”.
The first civil settlements resolves an allegation from the US Environmental Protection Agency (EPA) that VW violated the Clean Air Act “by selling approximately 590,000 cars that the United States alleges are equipped with defeat devices and, during normal operation and use, emit pollution significantly in excess of EPA-compliant levels”.
US Customs and Border Protection (CBP) also reached a civil settlement with VW for allegedly violating “criminal and civil customs laws by knowingly submitting to CBP material false statements and omitting material information, over multiple years, with the intent of deceiving or misleading CBP concerning the admissibility of vehicles into the United States”.
VW also settled against allegations of financial malpractice relating to the way it arranged loans and leases for customer vehicles and dealer floorplans.
Total civil settlements amount to a combined $US1.45b ($A1.95b).
Executives indicted include former head of development Heinz-Jakob Neusser, former head of engine development Jens Hadler, former head of engine development after-treatment Richard Dorenkamp, former quality management and product safety supervisor Bernd Gottweis and Jurgen Peter, who works in the company’s quality management and product safety department and was a liaison with regulatory agencies from March to July 2015.
The arrested Mr Schmidt held his environmental and engineering role in Auburn Hills, Michigan from 2012 to early 2015 before returning to Germany for a role reporting directly to Dr Neusser with part of his responsibility for emissions.
He is charged with one count of conspiracy to defraud the United States, to commit wire fraud and to violate the Clean Air Act. He is also accused of lying to US regulators in person when he travelled back to the US to face them over the dieselgate probe and during tele-conferences during 2015.
The other five employees, understood to still be in Germany and not yet arrested,are variously charged with conspiracy to defraud customers and violate the Clean Air Act by making false claims about its vehicles’ compliance with emissions standards, Clean Air Act violations and wire fraud.
US deputy attorney general Sally Yates said dieselgate “wasn’t simply the action of some faceless, multinational corporation”.
“This conspiracy involved flesh-and-blood individuals who used their positions within Volkswagen to deceive both regulators and consumers.”
In a statement, Volkswagen Group CEO Matthias Muller said the company “deeply regrets the behavior that gave rise to the diesel crisis”.
“Since all of this came to light, we have worked tirelessly to make things right for our affected customers and have already achieved some progress on this path,” he said.
“The agreements that we have reached with the U.S. government reflect our determination to address misconduct that went against all of the values Volkswagen holds so dear. They are an important step forward for our company and all our employees.”
US attorney general Loretta Lynch said authorities “will continue to examine Volkswagen’s attempts to mislead consumers and deceive the government”.
“And we will continue to pursue the individuals responsible for orchestrating this damaging conspiracy.”
VW Group supervisory board chairman Hans Dieter Potsch described the German giant as “no longer the same company we were 16 months ago”.
“The Supervisory Board and the Management Board have faced up to past actions,” he said.
"When the diesel matter became public, we promised that we would get to the bottom of it and find out how it happened – comprehensively and objectively”.
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