U.S. indicts six as Volkswagen agrees to $4.3 billion diesel settlement

Wed Jan 11, 2017 7:26pm EST
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By David Shepardson

WASHINGTON (Reuters) - Volkswagen AG (VOWG_p.DE: Quote) has agreed to pay the largest ever U.S. criminal fine levied on an automaker to settle charges that it conspired for nearly 10 years to cheat on diesel emission tests, while prosecutors on Wednesday charged six current and former senior VW executives for their roles in the scheme.

The German automaker agreed on Wednesday to pay $4.3 billion in U.S. civil and criminal fines and pay California $153.8 million. In total, VW has now agreed to spend up to $22 billion in the United States to address claims from owners, environmental regulators, U.S. states and dealers.

Among those indicted was Heinz-Jakob Neusser, former head of development for VW Brand, who was suspended in 2015. He was also previously head of engine development. Two other former heads of engine development, Jens Hadler and Richard Dorenkamp, were also indicted.

"It is now clear that Volkswagen's top executives knew about this illegal activity and deliberately kept regulators, shareholders and consumers in the dark - and they did this for years," said Andrew McCabe, the FBI's deputy director, at a press conference. "We can't put companies in jail but we can hold their employees personally accountable. We can force companies to pay hefty fines."

Five of the six current and former Volkswagen executives are in Germany and it is unclear if they will come to the United States to face charges since Germany typically does not extradite its citizens.

The indictment said the executives engaged in a 10-year conspiracy to cheat U.S. emissions tests and then cover up the excess emissions even as regulators questioned irregularities.

The Justice Department said that in 2006 VW realized it could not meet the tougher rules and VW engineers designed a system to detect when cars were being tested in the lab and then to emit up to 40 times legally allowable pollutants when driven. VW executives destroyed documents and other evidence in an attempt to avoid detection, the Justice Department said.

U.S. Attorney General Loretta Lynch declined to say if any higher level executives could face charges. "We will continue to pursue the individuals responsible for orchestrating this damaging conspiracy," she said.   Continued...

U.S. Attorney General Loretta Lynch speaks during a news conference accompanied by EPA Administrator Gina McCarthy, FBI Deputy Director Andrew McCabe and Acting Deputy Secretary Russell Deyo (for the Department of Homeland Security) in Washington U.S., January 11, 2017. REUTERS/Carlos Barria