A Senior Volkswagen Executive Has Been Charged With Wire Fraud In The Burgeoning VW Dieselgate Scandal

Wheels Fall Off Dieselgate As FBI Charges Senior Executive; More Arrests Seen

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The FBI charged a senior Volkswagen executive during the weekend with wire fraud and conspiracy as the net begins to tighten in the Dieselgate scandal. More arrests are likely to occur.

The wide net that authorities had cast after the Dieselgate scandal broke nearly a-year-and-a-half ago has begun to close with the arrest of major Volkswagen Group executive. The Federal Bureau of Investigation (FBI) charged him with wire fraud and conspiracy. Further executive arrests are likely.

The official who headed the automaker’s regulatory compliance office in the U.S. was detained in Florida Saturday, a New York Times report said, as he attempted to return home from a vacation. The executive, Oliver Schmidt, headed the automaker’s regulatory compliance office in the U.S. from 2014 to March 2015. Shackled and wearing a prison jumpsuit during his appearance in U.S. District Court in Miami Monday, he did not enter a plea, and he was ordered held until a hearing on Thursday by U.S. District Court Judge William Turnoff. Schmidt was charged with wire fraud and conspiracy in not disclosing the cheating device used by Volkswagen from 2006 to 2015 to rig turbodiesel emissions. Schmidt’s attorney, David Massey, said his client offered to cooperate last summer and met with FBI agents in London.

VW Management Knew

According to court paperwork, Volkswagen’s management board knew of the “existence, purpose and characteristics” of the so-called emissions defeat device in July 2015. The board chose, at that time, to not tell the U.S. A complaint was filed by the FBI against VW at the end of 2015. The complaint charges VW mislead regulators about emissions test cheating. A source would not say when other executives would be charged and was silent on whether they were still employees of the automaker.

“Volkswagen continues to cooperate with the Department of Justice as we work to resolve remaining matters in the United States,” VW said in a statement Monday. “It would not be appropriate to comment on any ongoing investigations or to discuss personnel matters.”

In an affidavit filed by the FBI, the evidence against Schmidt was developed from VW emails and three witnesses, including James Liang, the only VW engineer convicted in the emissions rigging scandal. According to the affidavit, Schmidt generated an email to another exec asking if the automaker should own the problem. “It should first be decided whether we are honest,” he wrote in the email. “if we are not honest, everything stays as it is.”

This is when the wheels started to come off the truth. It seems that Schmidt and others held meetings in Germany, Virginia, Michigan and California. In August 2015, they came up with the deception. They would conceal the defeat switch from regulators.

One executive, apparently invited to one of the meetings with California regulators – presumably from the California Air Resources Board (CARB) – decided not to attend the session so he “would not have to consciously lie,” Schmidt said to a different manager in an email.

Deception Would Continue


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