VW Reaches $4.3 Billion Settlement Over Criminal Allegations For ‘Dieselgate’

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Days after federal authorities arrested a Volkswagen executive in connection with the company’s ongoing “Dieselgate” scandal, the carmaker says it has reached a $4.3 billion settlement to resolve allegations of criminal wrongdoing. 

Reuters reports that the settlement with the Department of Justice and U.S. Customs, which is still subject to approval by VW’s board, includes a guilty plea by the carmaker related to certain criminal law provisions.

Details of the actual settlement are unclear, but the Justice Department is expected to release more information Tuesday or Wednesday.

Back in August, federal prosecutors from the U.S. Attorney’s office in Detroit and the Justice Department’s fraud and environmental crimes sections turned up evidence of criminal wrongdoing at VW related to its use of so-called “defeat devices.”

The Wall Street Journal reported at the time that VW was in settlement discussions with the Justice Department. It was thought that VW would either plead guilty or prosecutors would seek a deferred prosecution agreement that would essentially wipe out the charges if the carmaker adheres to settlement terms for a certain amount of time.

Deferred prosecution has been used several times in recent years when it comes to criminal activity from carmakers. Most recently, General Motors agreed to the option related to its massive ignition defect.

VW’s woes began in Sept. 2015 when the company admitted more than 500,000 of its vehicles in the U.S. — and more than 11 million across the world — were equipped with the defeat devices that allowed as much as 40 times the allowable rate of nitrogen oxide to be emitted during regulator driving.

The software was first detected during independent analysis by researchers at West Virginia University who were working with the International Council on Clean Transportation, a non-governmental organization. The findings raised questions about emissions levels, and the EPA, along with the California Air Resources Board, began further investigations into the issue.

Since then, the company has been working on a number of settlements with environmental regulators, customers, dealers, and federal prosecutors.