VW pleads guilty, agrees to $4.3 billion settlement; five more executives charged


VW pleads guilty, agrees to $4.3 billion settlement; five more executives charged
  1. VW pleads guilty, agrees to $4.3 billion settlement; five more executives charged
    autonews.com
    Volkswagen took a major step toward resolving one of the darkest chapters in its history Wednesday, pleading guilty to an emissions-cheating scandal and agreeing to pay $4.3 billion in criminal and civil charges as the…
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» VW says it negotiated $4.3 billion U.S. criminal settlement » VW posts record 2016 sales despite diesel-cheat crisis » High-level VW executives could face U.S. charges, report says UPDATED: 1/11/17 2:37 pm ET - adds details, comments

WASHINGTON (Bloomberg) -- Volkswagen took a major step toward resolving one of the darkest chapters in its history Wednesday, pleading guilty to an emissions-cheating scandal and agreeing to pay $4.3 billion in criminal and civil charges as the U.S. announced charges against five new individuals in Germany.

As part of its settlement, VW pleaded guilty to charges of conspiracy, obstruction of justice and using false statements to import cars to the U.S. 

The individuals are former VW brand head of development Heinz-Jakob Neusser; former VW head of engine development Jens Hadler; Richard Dorenkamp, who led a team of engineers that developed the first diesel engine designed to meet new U.S. emissions standards; former VW quality manager Bernd Gottweis; former environment and engineering office manager Oliver Schmidt; and quality manager Juergen Peter. 

“The investigation is still open and it is ongoing,” said Attorney General Loretta Lynch during the press conference. "Volkswagen knew of these problems and when regulators expressed concern Volkswagen obfuscated, they denied, and they ultimately lied."

In 2014, as U.S. suspicions increased about the real level of emissions from VW diesel cars, engineers and supervisors plotted ways to hide the defeat device, according to court documents. The next year, when regulators threatened not to certify 2016 models for sale in the U.S., Volkswagen’s senior officials in Wolfsburg, Germany, were told at a July 27 meeting about the deception.

Senior VW managers approved a plan in August 2015 for what the automaker’s employees would say in an upcoming meeting with California regulators, prosecutors allege. That plan called for Volkswagen employees to continue concealing the existence of the emissions device.

"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," VW CEO Matthias Mueller said in an emailed statement Wednesday.

Separate case

Separately, Volkswagen agreed to pay a civil penalty of $50 million to the Civil Division of the DOJ to settle potential claims asserted under the Financial Institutions Reform, Recovery and Enforcement Act.

"Volkswagen specifically denies any liability and expressly disputes these claims, which it is settling to avoid the uncertainty and expense of protracted litigation," it said in relation to the FIRREA penalty.

Click here for the DOJ press release and other documents.

The court filings detail a scheme in which the German automaker deceived regulators and customers for years, and dozens of employees destroyed documents, even after the scandal broke in September 2015.

The emissions-cheating disclosures undermined the sterling reputation of German engineering and threatened the viability of a company that vies with Toyota Motor Corp. as the world’s biggest carmaker. Volkswagen pressed to resolve investigations and lawsuits as quickly as possible, while working to repair its reputation with car buyers and dealers. It’s now selling more cars and trucks then ever, offsetting declines in the U.S. with strong sales in China.

So far: $23 billion cost

VW admitted in 2015 that about 11 million diesel cars worldwide were outfitted with so-called defeat devices, embedded algorithms used to game emissions tests. The settlement pushes the cost of the scandal to more than $23 billion in the U.S. and Canada and will force the company to increase the money set aside to pay fines and compensate affected customers, which currently totals 18.2 billion euros ($19.1 billion).

The government and Volkswagen have been trying to reach a settlement by Jan. 20 before Donald Trump is sworn into office and many of the people who have been overseeing the case step down. Though the case ends the company’s exposure to U.S. federal authorities, VW still faces probes from 42 state attorneys generals and a criminal probe and lawsuits in Germany.

Over the weekend, Oliver Schmidt, VW’s liaison with U.S. environmental regulators, was arrested in Miami as he was returning to Germany from vacation.…

Tags: #Volkswagen
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