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Volkswagen pleads guilty to three Dieselgate criminal charges

Das Auto be the end of it, says car maker as it coughs up billions in fines

Volkswagen today pled guilty in a Detroit, Michigan, court to scamming the American public through its "Dieselgate" vehicle emissions test cheating.

The car giant was charged with breaking environment protection laws, misleading investigators, and swindling citizens.

"Your honor, VW AG is pleading guilty to all three counts because it is guilty on all three counts," the company's general counsel Manfred Doess told the court Friday morning. It is the first time the company has ever pled guilty to a criminal charge.

Although the guilty plea was expected – the US Department of Justice claimed the car manufacturer had agreed to do so back in January as part of its $4.3 billion settlement with the US government – the official acceptance of its part in the scandal caused the company's share price to dip.

District Judge Sean Cox accepted the guilty plea, which comprised three charges of defrauding the US and its citizens by violating the Clean Air Act, obstructing justice, and importing cars into the country under false pretenses. Cox set a sentencing date of April 21.

As part of the settlement, Volkswagen will go through three years of probation, where it will be overseen by an independent corporate compliance monitor. It will pay $2.8bn to the US government and $1.5bn in civil penalties to a number of federal agencies. US attorney John Neal told the court that fine could have been as high as $34bn without the plea bargain.

Life begins at 40

In was in September 2015 that the Environmental Protection Agency (EPA) announced it had discovered Volkswagen had intentionally programmed its diesel cars to activate emissions controls only when they were being tested for those emission levels (effectively when the car was running but not moving, ie, on a test rig).

The result was that the cars passed nitrous oxide standards when being tested, but when in use they actually produced levels of pollution 40 times higher. More than 500,000 cars were affected in the United States alone; 11 million worldwide. The software was installed in cars over a six-year period, from 2009 through 2015.

The overall cost to Volkswagen in the US alone is expected to hit nearly $30bn as it processes claims from angry owners as well as other regulators, states attorneys and car dealerships.

The company has taken such a hit on its reputation that it decided to simply stop selling diesel cars in the US and currently has no plans to restart doing so.

Executives

In addition to charges and fines for the company, seven VW executives have been charged in connection to the scandal. One, former engineer James Robert Liang, took a plea deal in which he promised to cooperate with the federal investigation.

As part of the deal, he pled guilty to three counts of conspiracy and faces a maximum of five years behind bars, three years supervised release, and a maximum fine of $250,000.

And in January, the FBI arrested senior Volkswagen executive Oliver Schmidt while he was visiting the United States, nabbing him in Florida during a weekend.

The Feds claim Schmidt not only knew about the illegal "defeat devices" installed in some VWs, but tried to persuade executive management to stay quiet about them while the company was being investigated by California air quality officials. ®


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