Volkswagen expects $ 4.3B criminal, civil settlement with feds

Automaker to plead guilty on emissions

Volkswagen Group expects to reach a multibillion- dollar criminal and civil settlement with the U. S. Justice Department and U. S. Customs and Border Protection over its emissions scandal, the company confirmed Tuesday.

The German automaker said it expects to plead guilty to criminal charges and pay $ 4.3 billion to settle accusations that it rigged more than half a million U. S. diesel vehicles with software to cheat emissions standards.

It was not immediately clear whether any additional VW executives would be charged.

One executive, General Manager Oliver Schmidt, was charged Monday in Florida for allegedly conspiring to cheat regulations.

The FBI’s probe centered on two unidentified cooperating witnesses and a third VW worker, James Liang, who pleaded guilty in September to conspiracy, according to a criminal complaint unsealed Monday. A U. S. Justice Department spokesman was not immediately available for comment.

VW faces a criminal investigation in Germany, as well.

The company recently agreed to separate civil settlements worth about $ 17 billion for U. S. consumers and dealers who own diesel vehicles affected by the scandal, authorizing buybacks and free fixes.

The company said that as a part of the criminal settlement, it would accept an independent monitor responsible for overseeing its regulatory actions for three years.

The company said it negotiated a “concrete draft” of the deal. Its board must authorize the settlement.

The penalties would top Volkswagen’s previously set- aside provisions of more than $ 19 billion to cover the costs of the scandal, the company acknowledged.

The likely outcome brings its total scandal costs to nearly $ 22 billion.

Evercore ISI analyst Arndt Ellinghorst had estimated the criminal settlement would total $ 3 billion.

“This is good news,” Ellinghorst said Tuesday in a note to investors. “But in the broader scheme of things, we believe the most important news is that VW managed to come to an agreement that allows the company to move on from here.

“It’s a major relief that this doesn’t get dragged into the new U. S. administration.”

“The most important news is that VW managed to come to an agreement that allows the company to move on from here.” Evercore ISI analyst Arndt Ellinghorst

JULIAN STRATENSCHULTE, EPA The Volkswagen Touran has a 2.0l TDI type diesel engine. A settlement is near over rigged emissions in more than half a million diesel vehicles.