U.S. Snags, Charges VW Exec in Miami; Other Execs Told To Stay Away
In an ironic twist, Volkswagen warned its traveling executives Tuesday to steer clear of the U.S. following the arrest Oliver Schmidt, a high-level VW exec, who was returning home from a Florida vacation. The Department of Justice charged Schmidt with misleading regulators about the emissions-cheating devices installed on VWs. His second appearance in U.S. District Court in Miami, where has arrested, is scheduled Thursday.
The arrest of the VW exec caught the automaker flat-footed and wrong-footed. Many of those who traveled to Detroit to attend this week’s North American International Auto Show were surprised by the arrest. Indeed, lawyers for some top-level executives have told their clients to avoid travel in the U.S.
VW Settles Criminal Case
This comes against the backdrop of an announcement Wednesday where Volkswagen announced it had reached a $4.3 billion settlement with the Justice Department and other regulators, effectively ending the criminal case against the automaker for its Dieselgate scandal.
Schmidt’s arrest and the announcement of the settlement come against the backdrop of U.S. prosecutors preparing charges against other senior executives of the automaker, according to reports filed by Bloomberg financial news.
Automotive News put it all into context. “The arrest [of Schmidt] and looming charges against other senior executives show that the year-long investigation into the emissions cheating [scandal] is coming to a head in the final days of the Obama administration.” This is an outcome that Volkswagen has been seeking as it does not want to face the uncertainty of how the Trump administration might handle a foreign carmaker in its [Volkswagen’s] situation.
The 48-year-old Schmidt was the automaker’s liaison with U.S. environmental regulators. His first court appearance was Monday where he was held over for a second appearance on Thursday. U.S. District Court Judge William Turnoff ordered Schmidt held because the jurist considered the VW exec a flight risk. Schmidt’s attorney notified the court that his client would be willing to speak with investigators. The attorney did ask for Schmidt’s release.
Court papers lay out a potential roadmap for prosecutors to use against VW executives. The papers point out that VW senior officials were made aware of the “existence, purpose and characteristics” of the cheating device on diesel cars. The device lowered emissions when the cars were undergoing tests. Three cooperating insiders helped U.S. investigators find this information. The execs heard of the cheating device two months before the automaker admitted it had committed environmental fraud in September 2015.
Top Execs Assured