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Volkswagen Settles Dieselgate For Another $4.3 Billion; 6 Charged

Trying to settle its emissions cheating scandal before the new administration takes over, Volkswagen Wednesday agreed to pay an additional $4.3 billion in fines and penalties.

Seeking to put the Dieselgate scandal firmly in its review and move on, Volkswagen Wednesday pleaded guilty to rigging emissions tests in millions of its vehicles – 575,000 in the U.S. – and agreed to pay $4.3 billion in criminal and civil penalties. The automaker pleaded guilty to charges of conspiracy and obstruction of justice.

Charges Filed Against Six

Meantime, the U.S. announced it had filed charges against five individuals in Germany. The five, former and current executives of the automaker, are:

  • Heinz-Jakob Neusser, former VW brand head of development
  • Jens Hadler, former VW head of engine development
  • Richard Dorenkamp, leader of the team charged with developing the first diesel engine designed to meet U.S. emissions standards (EA189)
  • Bernd Gottweis, former VW quality manager
  • Juergen Peter, quality manager

Oliver Schmidt, engineering office manager, was arrested Saturday in Miami as he vacationed in Florida. He is still being held pending his hearing Thursday in U.S. District Court in Miami. Neusser and Peter are still employed by VW, though Neusser remains suspended. Dorenkamp and Gottweis are retired while Hadler is no longer with VW.

Atty. Gen. Loretta Lynch said during a press conference Wednesday that the “investigation is still open and it is ongoing. Volkswagen knew of these problems, and when regulators expressed concern Volkswagen obfuscated, they denied, and they ultimately lied. This announcement does not mean our investigation is complete … We will continue to pursue the individuals responsible for orchestrating this damaging conspiracy.” The attorney general declined to answer specific questions regarding people.

She did “stress that we are looking at individuals who were involved and would have had knowledge of the same information that’s currently being charged.”

According to court documents, in 2014 U.S. regulators had begun to question emissions levels from VW diesel cars. At the same time, VW engineers and supervisors worked on ways of hiding the defeat devices. They succeeded in keeping them out of the spotlight.

The effort began to crack a year or so later when regulators threatened the diesel certification for 2016 models for sale in the U.S. At a July 27 meeting, senior managers heard about the deception.

Deception Plan Approved

A couple of weeks later – in August 2015 – senior VW management okayed language for a meeting with California regulators. The plan called for continued denial of the existence of any defeat devices.

Matthias Mueller, chief executive of Volkswagen Group, Wolfsburg, Germany, said the “agreements we have reached … reflect our determination to address misconduct that went against all of the values Volkswagen holds so dear.”

On a separate issue, the automaker will pay $50 million to settle claims under the Financial Institutions Reform, Recovery and Enforcement Act. VW that it “… specifically, denies any liability and expressly disputes these claims, which it is settling to avoid the uncertainty and expense of protracted litigation.”

VW has been working hard to resolve things before the new administration takes office Jan. 20 when many of the people it has been working with to resolve issues will leave office.

Sources: Automotive News, Bloomberg, Reuters