Federal prosecutors charge six in Volkswagen emissions scandal
WASHINGTON — Federal prosecutors Wednesday announced criminal charges against six Volkswagen employees for their role in the company’s emissions scandal, a substantial turn by an outgoing administration that is trying to remake its image that it is soft on corporate crime.
The Volkswagen employees include a former head of the company’s brand as well as the head of engine development. One of them, Oliver Schmidt, was arrested in Florida last week.
Volkswagen also formally pleaded guilty to charges of conspiracy to commit wire fraud and to violate the Clean Air Act, customs violations and obstruction of justice. Many of the 600,000 U.S. cars equipped with emissions-cheating software were imported from Germany or Mexico.
The automaker is set to pay $4.3 billion in criminal and civil penalties, bringing the cost of the scandal to Volkswagen in the U.S. to $20 billion, including settlements of suits by car owners — one of the most costly corporate scandals ever.
Extracting a guilty plea from a major corporation was a feat for an administration that has been criticized for allowing companies to buy themselves out of indictments through socalled deferred prosecution deals. But the charges against the company officials were just as striking, and showed that prosecutors are determined to continue to hold the company’s highest ranks accountable, ensuring that the scandal drags on.
The Volkswagen scandal was the first major test of whether the Justice Department would hold executives more accountable. In 2015, the attorney general, Loretta Lynch, issued new policies to prioritize the prosecution of individuals at corporations accused of wrongdoing. The policies were a response to criticism that the department was too soft on Wall Street executives after the financial crisis.
Schmidt was arrested Saturday for his role in covering up Volkswagen’s emissions testing, just as he was about to board a flight to Germany from Miami International Airport. In September, a former Volkswagen engineer who worked for the company in California, James Liang, pleaded guilty to charges that included conspiracy to defraud the federal government and violating the Clean Air Act.
Prosecutors may have trouble bringing the executives to trial in the U.S. German law generally bars extradition of German citizens except within the European Union. Privately, Justice Department officials expressed little optimism that the five VW executives still at large will be arrested, unless they surrender or travel outside Germany.
U.S. regulators began investigating Volkswagen in early 2014 after a study by West Virginia University showed that its diesel cars polluted far more on the road than during official emissions tests.
Company executives knew that the cars were programmed to recognize when they were being tested and to deliver optimum pollution readings, according to investigators. But rather than admit wrongdoing, Volkswagen representatives provided false and misleading information for more than a year to the California Air Resources Board and the Environmental Protection Agency.