Former VW Exec Pleads Guilty to Helping Car Maker Cheat Emissions Standards in the US


by | Aug 7, 2017

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VWA former Volkswagen AG executive has pleaded guilty to helping the automaker cheat emissions standards — one that put more emphasis on selling cars than it did on obeying environmental rules.

Oliver Schmidt, who worked in the United States on environmental issues, pled guilty to 4 of the 11 charges in which he had been accused. About 600,000 vehicles were involved in the scandal.

“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 Jean Williams said, as quoted in The Hill. Upon sentencing in December, the judge could give him as much as 7 years in prison and fine him up to $400,000. 

The former car executive pled to conspiracy to defraud the United States, conspiracy to commit wire fraud, conspiracy to violate the Clean Air Act and violating the Clean Air Act, according to the news story. Thus far, the scandal has cost VW $25 billion. 

He told the court that while he didn’t invent the scandal, he became aware in 2015 that internal software was being used inside the cars to mislead regulators as to the level of emissions. But he chose to cover it up rather than make it right. For example, the cars actually emitted 40-times the amount of nitrogen oxide tied to climate change — something that the software covered up.  Schmidt said at the time of questioning that technical issues were to blame for the false results.

Other former VW executives have also been charged here in the United States. It remains unclear if they will be extradited.

We “continue to cooperate with investigations by the Department of Justice into the conduct of individuals,” Volkswagen said in statement. In March, VW pled guilty to defrauding the US government and was fined $4.3 billion. That is separate from the agreement to buy back cars in which it had installed the software to achieve bogus results. 

The agreement also includes recalling and repairing the affected vehicles as well buy-backs of older cars, or trade-in credits. All eligible owners of the affected vehicles will also receive some sort of cash compensation.

All this is a separate matter from the criminal prosecutions now taking place in this country, as well as the investigations occurring in Germany where VW is based.

Germany prosecutors are also looking into whether its former chief executive, Martin Winterkorn, knew about the software scandal ahead of time. He is being investigated on suspicion of fraud, reports Reuters, which says that he is already being eyed for market manipulation as well.

In September 2014, researchers at West Virginia University tested the Volkswagen and the Audi and discovered that the cars had been releasing more pollutants that the parent company had said. That’s when the car maker set out to systematically deceive consumers and regulators, some state attorney generals said.

However, VW said that its executive board did not learn of about the software that had created the false readings until August 2015. That’s when the matter was reported to US authorities, which have indicted six German car executives but not its chief executive.

“It’s incomprehensible why I wasn’t informed early and clearly,” Winterkorn, said in testimony before a parliamentary committee in Berlin, as reported in Industry Week. “I would have prevented any type of deception or misleading of authorities.” The story adds that the former exec said he was not a software engineer and thus didn’t have the skill set to make any demands on those who chose to skirt the law.

He resigned in September 2015, saying he was “endlessly sorry.” That is at the same time that US regulators made public that the automaker had installed software inside of its cars to falsify emissions readings.

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