U.S. charges Volkswagen executive with fraud over emissions scandal

Mon Jan 9, 2017 5:35pm EST
 
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By Zachary Fagenson and David Shepardson

MIAMI/DETROIT (Reuters) - Volkswagen AG VOWG_p.DE suffered a new setback on Monday when an executive was charged with conspiracy to defraud the United States over the company's diesel emissions cheating and the automaker was accused of concealing the cheating from regulators.

Oliver Schmidt, who was general manager in charge of VW's environmental and engineering office in Michigan, did not enter a plea at an initial appearance in U.S. District Court in Miami on Monday and was ordered held pending a hearing on Thursday by U.S. Magistrate Judge William C. Turnoff.

Schmidt, who was shackled and wearing a jail uniform, was charged with fraud and conspiracy in not disclosing a cheating device used to rig U.S. diesel emissions tests from 2006 through 2015.

He was arrested on Saturday in Florida after attempting to return to Germany from a vacation there, the Justice Department said. Schmidt's lawyer David Massey said Schmidt had learned of the investigation and reached out to the U.S. Federal Bureau of Investigation to offer to cooperate. Schmidt then met with FBI agents in London last year, he said.

The arrest was first reported by the New York Times.

The arrest and court appearance come as VW nears a $3 billion plus - and potentially $4 billion - settlement with the Justice Department and Environmental Protection Agency to resolve civil and criminal investigations into the diesel scandal, which sources have told Reuters could be announced as soon as Wednesday. Talks are still under way about some details of the settlements and no deal has been reached, sources said.

An FBI complaint unsealed on Monday against Schmidt said he and other VW employees told executive management about the "existence, purpose and characteristics" of an emissions cheating device in July 2015, and that the executives chose not to immediately disclose it to U.S. regulators.

The FBI complaint accused VW of deliberately misleading regulators about cheating pollution tests in the United States, but did not charge the company with a crime.   Continued...

 
Volkswagen executive Oliver Schmidt, charged with conspiracy to defraud the United States over the company's diesel emissions scandal is shown in this booking photo in Fort Lauderdale, Florida, U.S., provided January 9, 2017.  Courtesy of Broward County Sheriff's Office/Handout via REUTERS