Volkswagen Agrees to $4.3B Settlement in Emissions Cheating Scandal: Feds

(Updated) WASHINGTON, DC — German automaker Volkswagen has agreed to pay $4.3 billion in civil and criminal fines to settle its diesel emissions cheating scandal, the Justice Department said Wednesday. The government also charged six executives and employees — including Oliver Schmidt, who was in charge of Volkswagen's environmental and engineering office in Michigan — for their roles in the long-running scandal.

Earlier this week, the government said Schmidt knew emissions testing software was rigged to meet higher U.S. standards, but conspired with others between 2006 and 2016 to mislead federal regulators and customers about the true emissions performance of the affected V6 diesel engines. They were not named.

Volkswagen will plead guilty to three felony criminal charges — conspiracy to commit fraud, obstruction of justice and entry of goods by false statement. Although the automaker will be formally sentenced, VW agreed in documents filed in U.S. District Court in Detroit, to pay a $1.5 billion civil fine and a $2.8 billion criminal fine.

The civil fines would have been higher if the automaker hadn't previously agreed with U.S. regulators to spend $11 billion to either repair or buy back nearly 80,000 cars with the so-called "defeat device" software. Criminal fines could have been as high as $34.1 billion if the case had gone to trial.

Also as part of the settlement, VW agreed to oversight by an independent monitor for three years and other reforms, and said it would fire six employees, suspend eight and discipline three others for their roles in the coverup.

The settlement was announced by U.S. Attorney General Loretta Lynch and others at a Wednesday afternoon news conference. Lynch was joined by Environmental Protection Agency Administrator Gina McArthy, FBI Deputy Director Andrew McCabe, Acting Deputy Secretary Russell C. Deyo for the Department of Homeland Security and U.S. Attorney for the Eastern District of Michigan Barbara L. McQuade will join Lynch.

You can watch the live stream here:

(Patch's earlier story) DETROIT, MI — A multi-million settlement is imminent between Volkswagen and the U.S. government over allegations that the German automaker rigged emissions software on more than a half-million diesel-engine vehicles sold in the United States, the company said Tuesday. Eager to put the scandal in the past before President-elect Donald Trump takes office, the automaker is expected to plead guilty to criminal charges and pay $4.3 billion to settle the case.

Volkswagen's expected settlement with the Justice Department and U.S. Customs and Border Protection could come as early as Tuesday or Wednesday, well before Trump is inaugurated on Jan. 20. The announcement of the settlement came a day after the Justice Department announced criminal charges against an executive accused of tricking U.S. consumers to buy dirty cars in the years-long emissions cheating scandal.

Oliver Schmidt, who has been in charge of Volkswagen’s Environmental and Engineering office in Auburn Hills, was charged with one count of conspiracy to defraud the United States, commit wire fraud and violate the Clean Air Act.

It’s unclear if more executives will be charged in the scandal. Last September, James Liang, a former engineer who worked for Volkswagen in California, pleaded guilty to charges that he conspired to defraud the government and violated the Clean Air Act. He agreed to cooperate with the government in its ongoing investigation.

Two other witnesses are cooperating in the Federal Bureau of Investigation probe, according to court documents.

As part of the settlement, VW will agree to an independent monitor who will oversee all regulatory activities for three years, the Detroit Free Press reported.

VW’s board of directors still has to approve the settlement, but that’s expected to happen. The automaker still faces a criminal investigation in Germany.

Photo by Gábor Kovács via Flickr Commons