Published: Fri, May 04, 2018
Markets | By Otis Pena

US Justice Department charges former VW CEO with conspiracy, wire fraud

US Justice Department charges former VW CEO with conspiracy, wire fraud

"If you try to deceive the United States, then you will pay a heavy price", Attorney General Jeff Sessions said.

After this meeting, Winterkorn allegedly approved a course of action to send Oliver Schmidt to meet with a senior CARB official to get the approval to sell 2016 model year vehicles in the United States without revealing the defeat device.

Volkswagen did not immediately comment.

Winterkorn was CEO of Volkswagen when the automaker admitted it had cheated US emissions tests and its cars illegally polluted up to 40 times more than allowed by federal law. The memo also stated it was likely that authorities would investigate whether or not the vehicles contained defeat devices.

When such an investigation did open up, the indictment charges that Winterkorn and other executives "pursued a strategy of concealing the defeat device in responding to questions from USA regulators, while appearing to cooperate".

In a statement, Volkswagen said "It continues to cooperate with investigations by the Department of Justice into the conduct of individuals".

Volkswagen's new CEO, Herbert Diess, pledged earlier Thursday that the German manufacturer would step up compliance systems to prevent the sort of misconduct that set off the deepest crisis in the company's history. Schmidt was in charge of emissions compliance for Volkswagen cars in the USA, and he was arrested while on vacation in Miami in 2016.

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The indictment unsealed today says that around March 2014, Winterkorn learned of a study taking place at West Virginia University's Center for Alternative Fuels, Engines, and Emissions that showed that VW diesel vehicles were giving off emissions beyond legal limits.

The indictment describes a July 27, 2015 meeting at which Volkswagen employees presented PowerPoint slides to Winterkorn and "other senior VW AG management at an in-person meeting at VW's headquarters in Wolfsburg".

VW had initially suggested that only lower-level executives knew of the cheating.

A spokeswoman for the U.S. Attorney's Office for the Eastern District of MI in Detroit said Winterkorn was not in custody.

In total, nine people have been charged and two former VW executives have pleaded guilty in the case and been sentenced to prison terms. One former manager of VW's subsidiary Audi AG, Giovanni Pamio, 61, an Italian citizen, has been charged by complaint and now remains in Germany pending extradition.

Six former Volkswagen executives charged, including Winterkorn, are believed to be in Germany and have avoided facing USA prosecutors. "They were allegedly shown a PowerPoint presentation which explained "(1) how VW was deceiving US regulators, including precisely what information had been disclosed and what had not yet been disclosed; and (2) the potential consequences of VW being caught cheating".

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