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| Attorney General Loretta Lynch, accompanied by Environmental Protection Agency Administrator Gina McCarthy, right, and others, speaks during a news conference at the Justice Department in Washington, Wednesday, Jan. 11, 2017, to discuss Volkswagen emissions. Six high-level Volkswagen employees have been indicted by a grand jury in the company's diesel emissions cheating scandal, as the company admitted wrongdoing and agreed to pay a record $4.3 billion penalty |
WASHINGTON
(AP) -- Six high-level Volkswagen employees from Germany were
indicted in the U.S. on Wednesday in the VW emissions-cheating scandal,
while the company itself agreed to plead guilty to criminal charges and
pay $4.3 billion - by far the biggest fine ever levied by the government
against an automaker.
In announcing the
charges and the plea bargain, Justice Department prosecutors detailed a
large and elaborate scheme inside the German automaker to commit fraud
and then cover it up, with at least 40 employees allegedly involved in
destroying evidence.
"Volkswagen obfuscated, they denied and they ultimately lied," Attorney General Loretta Lynch said.
Prosecutors
may have trouble bringing the executives to trial in the U.S. German
law generally bars extradition of the country's citizens except within
the European Union. Privately, Justice Department officials expressed
little optimism that the five VW executives still at large will be
arrested, unless they surrender or travel outside Germany.
Still,
the criminal charges are a major breakthrough for a Justice Department
that been under pressure to hold individuals accountable for corporate
misdeeds ever since the 2008 financial crisis.
Lynch
held out the possibility of charges against more high-ranking VW
executives. "We will continue to pursue the individuals responsible for
orchestrating this damaging conspiracy," she said.
VW
admitted installing software in diesel engines on nearly 600,000 VW,
Porsche and Audi vehicles in the U.S. that activated pollution controls
during government tests and switched them off in real-world driving. The
software allowed the cars to spew harmful nitrogen oxide at up to 40
times above the legal limit.
U.S. regulators
confronted VW about the software after university researchers discovered
differences in testing and real-world emissions. Volkswagen at first
denied the use of the so-called defeat device but finally admitted it in
September 2015.
Even after that admission, prosecutors said, company employees were busy deleting computer files and other evidence.
The
fines easily eclipse the $1.2 billion penalty levied against Toyota in
2014 over unintended acceleration in its cars. VW also agreed to pay an
additional $154 million to California for violating its clean air laws.
The
penalties bring the cost of the scandal to VW in the United States to
nearly $20 billion, not counting lost sales and damage to the
automaker's reputation. Volkswagen previously reached a $15 billion
civil settlement with environmental authorities and car owners in the
U.S. under which it agreed to repair or buy back as many as a
half-million of the affected vehicles.
The
company pleaded guilty to conspiracy, obstruction of justice and
importing vehicles by using false statements. Under the agreement, VW
must cooperate in the continuing investigation let an independent
monitor oversee its compliance for three years.
The
six supervisors indicted by a federal grand jury in Detroit were
accused of lying to environmental regulators or destroying computer
files containing evidence.
All six are German
citizens, and five remained in Germany. The only one under arrest was
Oliver Schmidt, who was seized over the weekend in Miami during a visit
to the U.S.
Schmidt was in charge of VW's
compliance with U.S. environmental regulations. Those indicted also
included two former chiefs of Volkswagen engine development and the
former head of quality management and product safety. Prosecutors said
one supervised 10,000 employees.
All six were
charged with conspiracy to defraud the U.S. by making false statements
to regulators and the public. Three were also charged with fraud and
clean-air violations.
Government documents say
one engine development supervisor asked an assistant to search another
supervisor's office for a hard drive that contained emails between them.
Then another assistant was asked to throw it away, prosecutors said.
According
to the plea agreement, Volkswagen officials began deceiving the
Environmental Protection Agency and other regulators starting in 2006,
when they realized new diesel engines wouldn't meet 2007 emissions
standards.
Under the direction of supervisors,
VW employees borrowed the defeat device idea from VW's Audi luxury
division, which was developing different engines with similar software.
In
November 2006, some employees raised objections to the defeat device to
the head of VW-brand engine development, prosecutors said. That
official allegedly directed the employees to continue and warned them
"not to get caught."
In 2014, VW employees
learned about a West Virginia University study that found emissions
discrepancies in VWs. Three of the supervisors and other employees
decided not to disclose the defeat device to U.S. regulators,
prosecutors said.
In August 2015, a VW employee ignored instructions from supervisors and told U.S. regulators about the device.
VW
also faces an investor lawsuit and criminal probe in Germany. In all,
some 11 million vehicles worldwide were equipped with the software.
