Second VW employee arrested over emissions scheme


Second VW employee arrested over emissions scheme
  1. Second VW employee arrested over emissions scheme
    www.brandonsun.com
    DETROIT - The Volkswagen executive who once was in charge of complying with U.S. emissions regulations was arrested during the weekend in Florida and accused of deceiving federal regulators about the use of special software that cheated on emissions tests. Oliver Schmidt, who was general…
    Lifestyle

DETROIT - The Volkswagen executive who once was in charge of complying with U.S. emissions regulations was arrested during the weekend in Florida and accused of deceiving federal regulators about the use of special software that cheated on emissions tests.

Oliver Schmidt, who was general manager of the engineering and environmental office for VW of America, was charged in a criminal complaint with conspiracy to defraud the U.S. government and wire fraud.

Schmidt, 48, a resident of Germany, is the second VW employee to be arrested in an ongoing federal investigation into VW, which has admitted that it programmed diesel-powered vehicles to turn pollution controls on during tests and to turn them off in real-world driving. The scandal has cost VW sales and has tarnished its brand worldwide.

He was ordered held Monday at a hearing in Miami, where prosecutors argued that he posed a flight risk if released. He faces another hearing Thursday. After that he likely will be taken to Detroit, where the Justice Department investigation is based.

The complaint, dated Dec. 30, accuses Schmidt of conspiring with other Volkswagen executives to mislead U.S. regulators about why their vehicles emitted higher emissions on the road than during tests. Schmidt "offered reasons for the discrepancy" other than the fact that the company was cheating on emissions tests through illegally installed software on its diesel vehicles, court documents say.

Tests commissioned by the non-profit International Council on Clean Transportation in 2014 found that certain Volkswagen models with diesel engines emitted more than the allowable limit of pollutants. More than a year later, Volkswagen admitted to installing the software on about 500,000 2-litre diesel engines in VW and Audi models in the U.S. The company later said some 3-litre diesels also cheated.

After that study, Schmidt, in an apparent reference to VW's compliance with emissions, wrote a colleague to say, "It should first be decided whether we are honest. If we are not honest, everything stays as it is."

He later emailed another executive with an analysis that listed possible monetary penalties from the Environmental Protection Agency.

"Difference between street and test stand must be explained. (Intent=penalty!)," Schmidt wrote, according to the complaint.

Schmidt's bio for a 2012 auto industry conference said he was responsible for ensuring that vehicles built for sale within the U.S. and Canada comply with "past, present and future air quality and fuel economy government standards in both countries." It says he served as the company's direct factory and government agency contact for emissions regulations. The criminal complaint says Schmidt was promoted in 2015 as a principal deputy of a senior manager.

Schmidt's attorney, David Massey, said in court Monday that his client has assets in the U.S., or the assets of friends, totalling about $1 million that would secure his bond. He said Schmidt had been co-operating with the FBI on the emissions probe and had no intent to flee. Massey also said Schmidt was arrested while on vacation in South Florida and had no idea he was going to be charged with a crime while in the U.S.

But Justice Department prosecutor Ben Singer said Schmidt had been evasive with regulators and warned a judge that he was a flight risk.

Volkswagen said in a statement Monday that it is co-operating with the Justice Department in the probe. "It would not be appropriate to comment on any ongoing investigations or to discuss personnel matters," the statement said.

Herbert Diess, a member of Volkswagen AG's board of management, appeared in Detroit Sunday evening to introduce a new version of VW's Tiguan SUV ahead of the North American International Auto Show. He wouldn't comment when asked if some Volkswagen executives refused to come to the auto show for fear of being arrested.

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