US Federal prosecutors have announced criminal charges against six Volkswagen executives for their roles in the company’s emissions-cheating scandal.
The six include a former head of development of the Volkswagen brand and the head of engine development. One of those charged, Oliver Schmidt, was arrested in Florida last week; the other five are believed to be in Germany.
VW also formally pleaded guilty to charges of conspiracy to commit wire fraud and to violate the Clean Air Act, customs violations and obstruction of justice. Many of the 600,000 cars in the United States equipped with emissions-cheating software were imported from Germany or Mexico.
The carmaker is set to pay $4.3 billion in criminal and civil penalties in connection with the federal investigation, bringing the total cost of the deception to Volkswagen in the United States, including settlements of suits by car owners, to $20 billion — one of the costliest corporate scandals in history.
“Volkswagen knew of these problems,” Attorney General Loretta E. Lynch said at a news conference in Washington. “When regulators expressed concerns, Volkswagen obfuscated,” she said. “And they ultimately lied.”
The VW employees charged were Heinz-Jakob Neusser, 56, who oversaw development of the company’s brand; Jens Hadler, 50, who oversaw engine development; Richard Dorenkamp, 68, another supervisor of engine development; Bernd Gottweis, 69, who helped oversee quality management; and Jürgen Peter, 59, who was a liaison between regulatory agencies and the carmaker. They and Mr. Schmidt were charged with conspiracy to defraud the United States, defraud customers and violate the Clean Air Act.
It is unclear whether the five executives named will ever appear in a United States court. If they are in Germany, the country does not normally extradite its citizens. Even if Germany does not extradite or prosecute them, the charges in the United States would severely limit their ability to travel.
None of the executives charged were members of the VW management board, although several of them reported directly to the board. The lack of accusations against any top managers could help insulate Volkswagen from lawsuits by shareholders who have accused the company of failing to disclose the risks it faced.
Several of those charged played management roles in the development of the diesel engines that were equipped with so-called defeat devices, others have been accused of concocting excuses for the excess emissions and trying to prevent regulators from discovering the truth. VW also admitted that its employees destroyed emails and other evidence in 2015 as it became clear that regulators would soon learn of the illegal software.
Volkswagen’s board has approved the company’s agreement with the US government. It still needs the approval of Judge Sean F. Cox of Federal District Court in Detroit. As part of the settlement, the company will be under probation for three years and will be subject to the oversight of an independent monitor. VW must also co-operate with investigations into current and former employees.
Meanwhile, in the UK, the BBC has reported on a legal firm who is aware of 10,000 VW owners who have expressed an interest in suing VW. They estimated that owners could get “several thousand” pounds in compensation. One firm, Harcus Sinclair, is applying for a group litigation order – which is similar to a US class action lawsuit – in the High Court later this month. The legal action is aimed at securing compensation for people who own or have previously owned one of the vehicles.
In the UK around 1.2 million diesel engine cars are potentially affected by the emissions scandal.
Harcus Sinclair said it was basing its estimate of the level of compensation owners could get on the €5,000 (£4,300) per owner awarded in Spain and the $8-10,000 awarded in the US.
“The key allegation is that the affected cars should not have been certified as fit for sale because it is alleged that they produced higher levels of nitrogen oxide and nitrogen dioxide emissions than the rules allowed,” it said in a statement.
Seventy-seven current or former VW owners have put their names to Harcus Sinclair’s application for a group litigation order which will be heard in the High Court on 30 January.
The firm hopes that the marketing and publicity surrounding this launch will encourage more drivers to sign up to the action. It added it was also talking to other law firms about joining forces with them, in an effort to avoid cost duplication.
If the High Court gives the action the go-ahead, a pre-trial hearing will follow and then the trial itself in about 18 months.
In a statement, VW said: “We have been notified that Harcus Sinclair intends to bring proceedings against Volkswagen on behalf of 77 claimants in the English High Court.
“We intend to defend such claims robustly,” it added.
Another law firm, Leigh Day, said it had been approached by about 10,000 VW owners regarding the emissions issue. However, the company said it wanted to avoid the “cost risk associated with pursuing the matter through the courts”. Instead, it had submitted some test cases to the dispute resolution body, the Motor Ombudsman.