- The Washington Times - Wednesday, January 11, 2017

The Justice Department announced Wednesday that Volkswagen will plead guilty to three felonies and pay $4.3 billion in civil and criminal penalties for its long-running violations of emissions standards and that six high-level VW officials have been indicted on charges connected to the deception.

The German automaker will admit to rigging about 590,000 diesel vehicles to cheat pollution tests and lying to U.S. investigators to cover up the conspiracy.

“For years, VW advertised its vehicles as complying with federal anti-pollution measures,” Attorney General Loretta E. Lynch said in announcing the charges. “But in fact, hundreds of thousands of cars that VW sold in the United States were pumping illegal levels of nitrogen oxides into our atmosphere — up to 40 times more than the amounts permitted under federal law.”

In addition to the monetary penalties, the plea agreement will make Volkswagen AG subject to three years of oversight by an independent corporate compliance monitor.

Six high-level officials were indicted on charges related to the scheme, which investigators said continued for nearly 10 years.

Those indicted are: Heinz-Jakob Neusser, who served as head of development; Jens Hadler, who served as head of engine development; Richard Dorenkamp, who headed the engine development after-treatment department; Bernd Gottweis, a supervisor with responsibility for quality management and product safety; Oliver Schmidt, the general manager in charge of the environment and engineering office in Auburn Hills, Michigan; and Jurgen Peter, who worked on the quality management and product safety group.

“This wasn’t simply the action of some faceless, multinational corporation,” said Deputy Attorney General Sally Q. Yates. “This conspiracy involved flesh-and-blood individuals who used their positions within Volkswagen to deceive both regulators and consumers. From the start of this investigation, we’ve been committed to ensuring that those responsible for criminal activity are held accountable. We’ve followed the evidence — from the showroom to the boardroom — and it brought us to the people whose indictments we’re announcing today.”

VW will pay the largest penalties ever levied by the U.S. government against an auto company. In 2014, Toyota Motor Corp. was ordered to pay a $1.2 billion penalty for defects that allowed vehicles to accelerate unintentionally.

“We did see a level of knowledge and intent in this company that set it apart” from charges and penalties levied against other car companies, Ms. Lynch said.

Volkswagen will pay $2.8 billion in criminal and $1.5 billion in civil penalties and admit guilt to charges including conspiracy to defraud customers and the United States and to violate the Clean Air Act, and obstruction of justice for lying about the scheme and destroying documents.

Volkswagen has admitted equipping diesel cars with sophisticated software that turned on emissions controls when engines were being tested by the Environmental Protection Agency, then turned them off during normal driving. The software, called a “defeat device” because it defeated the emissions controls, improved engine performance but spewed harmful nitrogen oxide at up to 40 times above the legal limit.

Volkswagen also has reached a $15 billion civil settlement with environmental authorities and car owners in the U.S. under which it agrees to buy back up to 500,000 vehicles. The company faces an investor lawsuit and criminal probe in Germany. In all, some 11 million vehicles worldwide were equipped with the software.

Authorities said Wednesday that the investigation is continuing, though officials declined to say whether any other top executives might be accused of wrongdoing.

Five of the six Volkswagen officials facing criminal charges are in Germany. Ms. Lynch expressed faith in prior cooperation between German and U.S. officials, but she declined to speculate about how U.S. authorities might bring the men into custody.

“I can’t say how that will be resolved,” she said.

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