Volkswagen to Pay $2.8B Criminal Fine in Emissions Scandal

FILE – In this Oct. 13, 2015, file photo, a Volkswagen Touareg diesel is tested in the Environmental Protection Agency’s cold temperature test facility in Ann Arbor, Mich. Volkswagen has agreed to pay at least US$ 1.2 billion in buybacks and compensation to settle claims from U.S. owners of cars with larger diesel engines that the company rigged to cheat on emissions tests. The proposed settlement filed late Tuesday, Jan. 31, 2017 in U.S. District Court in San Francisco covers owners of some 75,000 Audi, Volkswagen and Porsche cars with 3.0-liter diesel engines. (AP Photo/Carlos Osorio, File)

DETROIT (CN) – A federal judge ordered Volkswagen to pay $2.8 billion in criminal penalties Friday after the automaker admitted last month to illegally calibrating diesel engines so they could get around U.S. pollution rules.

The fine was part of a $4.3 billion plea agreement with the federal government that was drafted in January. The auto giant officially pleaded guilty in March.

U.S. District Judge Sean Cox approved the deal Friday and levied the $2.8 billion criminal penalty.

Part of the agreement calls for federal monitoring of future business operations. Volkswagen has pledged to develop more battery-powered vehicles in the coming years.

Volkswagen has previously agreed to more than $17 billion in civil settlements with consumers and dealers who bought the diesel vehicles at issue.

Volkswagen, currently the world’s largest automaker, could have been fined anywhere from $17 billion to $34 billion under U.S. law but was said to be cooperative, engaged – save for a few executives and workers who obstructed the investigation – and actively correcting its corporate culture.

The automaker was charged with fraud in September 2015 when it was discovered that special software was designed to mask the emission levels of their popular diesel engines in a range of models when they were tested by Environmental Protection Agency regulators.

“The sentencing of Volkswagen marks a significant milestone in this historic case,” Acting U.S. Attorney Daniel Lemisch said in a statement.  “Volkswagen has been punished for its scheme to defeat U.S. environmental standards and cheat U.S. consumers. This prosecution sends a strong message to Volkswagen and others that we take our environmental laws seriously and that federal prosecution awaits those who defraud the EPA.”

The government also said VW agreed to pay an additional $1.5 billion to settle the EPA’s claim for civil penalties in connection with the importation and sale of the cars, as well as U.S. Customs and Border Protection claims for customs fraud.

The Detroit News reported that VW lawyer Manfred Doess addressed Judge Cox on Friday before he imposed the sentence.

“We let people down and for that we are deeply sorry,” he said. “Volkswagen today is not the same company that it was 18 months ago.”

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