VW Execs Face Criminal Charges in Emissions Scandal

(CN) – Six Volkswagen executives will face criminal charges in the automaker’s emissions cheating scandal, and the company will plead guilty to conspiracy and obstruction of justice – paying $4.3 billion in penalties, the U.S. Justice Department said Wednesday.

“Today’s actions reflect the Justice Department’s steadfast commitment to defending consumers, protecting our environment and our financial system, and holding individuals and companies accountable for corporate wrongdoing,” Attorney General Loretta Lynch said at a press conference in Washington.

Volkswagen will plead guilty to conspiring to defraud the United States, obstructing justice and importing false goods.

The plea deal comes more than 15 months after it was revealed the automaker installed emissions-cheating software in more than half a million diesel-powered vehicles sold in the United States.

The defeat devices mask pollutants during tests, and the cars spew up to 40 times more nitrogen oxide on the road than allowed under federal law.

As part of the plea deal, Volkswagen will pay a $2.8 billion criminal fine and $1.5 billion in civil penalties for violations of environmental, customs and financial regulations. That’s on top of $15 billion the company agreed to pay in two settlements last year to buy back or repair affected vehicles and invest in air quality improvement programs.

Six high-level Volkswagen executives – Richard Dorenkamp, Bernd Gottweis, Jens Hadler, Heinz-Jakob Neusser, Jurgen Peter, and Oliver Schmidt – will also face a range of charges, including conspiracy to defraud, violating the Clean Air Act and wire fraud.

Lynch said each of those individuals served in roles of “significant responsibility,” including overseeing engine development and serving on the management board, and that each seriously abused their positions.

Schmidt – the German automaker’s former emissions compliance director – was arrested at Miami International Airport Saturday night while waiting to board a plane back to Germany.

The other executives remain in Germany, and the United States will work with authorities there to extradite them, Lynch said.

FBI Deputy Director Andrew McCabe said the plea deal and criminal charges, which come after a 16-month criminal investigation, prove that “no corporation is too big, no corporation is too global, and no person is above the law.”

As part of its plea deal, Volkswagen will remain on corporate probation for three years. During that time, the company must submit to an independent monitor to ensure it complies with mandates as part of the deal.

U.S. Environmental Protection Agency Director Gina McCarthy said the deal ensures the company will restructure how it does business to separate engine and auto designers from those who test vehicles for emissions.

McCarthy said the independent auditing and structural changes will make it harder for Volkswagen to perpetrate that kind of fraud against American consumers and regulators in the future.

In a statement issued Wednesday, Volkswagen Group CEO Matthias Muller said, “Volkswagen 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. 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.”

Lynch stressed that Wednesday’s announcement does not signal an end to the Justice Department’s investigation into corporate wrongdoing at Volkswagen.

“We will continue to examine Volkswagen’s attempts to mislead consumers and deceive the government,” Lynch said. “We will continue to pursue the individuals responsible for orchestrating this damaging conspiracy.  And we will continue to vigorously enforce the laws of the United States.”

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