Volkswagen AG has agreed to plead guilty to three federal felony counts and pay $2.8 billion in criminal fines for a massive, years-long conspiracy to defraud U.S. regulators and consumers by rigging diesel emissions tests. The German auto giant schemed to sell nearly 590,000 diesel vehicles in the United States equipped with “defeat device” software designed to cheat on EPA and California Air Resources Board (CARB) testing—vehicles it falsely marketed as “clean diesel” models.
In addition to the criminal penalty, Volkswagen will pay $1.5 billion to settle civil claims involving environmental violations, customs fraud, and financial misconduct. The civil resolution covers EPA penalties for illegal importation and sale of non-compliant vehicles, customs fraud claims by U.S. Customs and Border Protection (CBP), and violations of the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA). The settlement mandates injunctive relief requiring Volkswagen to overhaul its compliance systems.
The Justice Department unsealed a criminal indictment in the Eastern District of Michigan charging six Volkswagen executives: Heinz-Jakob Neusser, 56, Jens Hadler, 50, Richard Dorenkamp, 68, Bernd Gottweis, 69, Oliver Schmidt, 48, and Jürgen Peter, 59—all of Germany. They are each charged with one count of conspiracy to defraud the United States, defraud VW’s U.S. customers, and violate the Clean Air Act by concealing the defeat software and making false statements to regulators.
Volkswagen is specifically charged with conspiracy to defraud the U.S., obstruction of justice for destroying evidence tied to the scheme, and making false statements to federal authorities to facilitate the importation of non-compliant vehicles. Under the plea agreement—subject to court approval—the company will be placed on three years’ probation and submit to an independent corporate compliance monitor for at least three years. VW must also fully cooperate with the DOJ’s ongoing investigation into individual culpability.
“Volkswagen’s blatant cheating on U.S. emissions standards not only harmed our clean air, but it also created a competitive disadvantage for other automakers who play by the rules,” said United States Attorney Barbara McQuade. “Today’s announcement of a corporate felony guilty plea and indictments against Volkswagen executives demonstrates that corrupt corporations and individual employees will be held accountable.”
David P. Gelios, Special Agent in Charge of the FBI’s Detroit Division, emphasized the government’s resolve: “Volkswagen and its executives are accused of involvement in a massive fraud scheme to intentionally sell diesel cars that violated U.S. emissions rules. Today’s charges signify our government’s commitment to protect the American automotive consumer.” The case marks one of the largest corporate environmental fraud settlements in U.S. history.
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Key Facts
- State: Michigan
- Agency: DOJ USAO
- Category: Fraud & Financial Crimes
- Source: Official Source ↗
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