Volkswagen Exec Pleads Guilty In Emissions Cheating Scandal

DETROIT, MI — Volkswagen AG executive Oliver Schmidt pleaded guilty in federal court in Detroit Friday in connection with the German automaker’s massive emissions cheating scandal. He will be sentenced Dec. 6, when he could get up to seven years in prison and a fine of $400,000.

Schmidt, 48, a German citizen and resident, pleaded guilty to one count of conspiracy to defraud the U.S., to commit wire fraud and to violate the Clean Air Act; and to one count of violating the Clean Air Act. He was indicted by a federal grand jury on Jan. 11, along with five other VW executives and employees.

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Schmidt was a senior aide to VW’s head of engine development in the automaker’s U.S. Environment and Engineering Office, where he conspired to mislead U.S. regulators about the compliance of diesel engines to clean air laws. He is among eight current or former VW executives who have been criminally charged in the scandal, which has cost vehicle owners more than $150 million.

As part of his guilty plea, Schmidt admitted that he agreed with other VW employees to mislead and defraud the U.S. and domestic customers who purchased diesel vehicles, and to violate the Clean Air Act. A 2014 study showed substantial discrepancies nitrogen oxide emissions from certain VW vehicles when measured on the road compared to standard drive cycle tests, and Schmidt admitted he was told the following year that VW had been installing cheating software in some of its diesel engines for several years.

Schmidt also admitted to consulting with other VW employees in the summer of 2015 to determine how to respond to questions from U.S. regulators about VW’s diesel vehicles without revealing the defeat device. After a meeting with VW management in July 2015, VW management instructed Schmidt to seek a meeting with a senior employee of the California Air Resources Board and to obtain approval from CARB for the sale of additional VW diesel vehicles in the U.S. without disclosing the fact that VW was cheating on emissions tests.

Schmidt admitted following VW management’s instructions. During two meetings in August 2015, Schmidt attempted to obtain approval for the sale of additional VW diesel vehicles by responding to questions from CARB without revealing what he knew was the truth — that the real cause for the vehicles’ substantially higher emissions on the road was that VW had intentionally installed software designed to cheat and evade emissions testing, he admitted.

Schmidt further admitted that he knew that in August 2015 VW employees submitted to the U.S. Environmental Protection Agency two required Clean Air Act reports that were fraudulent and misleading. Moreover, Schmidt knew that VW was falsely marketing diesel vehicles to the U.S. public as being environmentally friendly and compliant with U.S. environmental regulations, including by promoting increased fuel economy, he admitted.

“Schmidt participated in a fraudulent VW scam that prioritized corporate sales at the expense of the honesty of emissions tests and trust of the American purchasers,” Deputy Assistant Attorney General Williams said in a statement. “Schmidt along with each and every official involved in this emissions scandal will be held fully accountable for their actions by the Department of Justice as this investigation continues.”

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