Feds Bring Criminal Charges Against 6 Volkswagen Executives

Image courtesy of Thomas Hawk

In a rare instance of criminal charges being brought against executives at one of the world’s largest car companies, federal authorities have indicted six Volkswagen employees involved in the decade-long “Dieselgate” scandal and cover-up. 

Today’s indictments come in addition to the $4.3 billion in civil and criminal penalties that Volkswagen has agreed to pay to the Justice Department, the Environmental Protection Agency, and the U.S. Customs office.

The criminal charges included in the settlement are being brought against a half-dozen execs who allegedly played a part in creating the “defeat device” technology used in VW’s “clean diesel” vehicles to skirt federal emissions standards.

The six individuals are:

• Heinz-Jakob Neusser, head of development for VW Brand until 2015
• Jens Hadler, head of Engine Development for VW until 2011
• Richard Dorenkamp, head of VW’s Engine Development After-Treatment Department until 2013
• Bernd Gottweis, supervisor with responsibility for Quality Management and Product Safety until 2014
• Oliver Schmidt, (arrested Sunday) General Manager in charge of the Environment and Engineering Office until 2015
• Jürgen Peter, VW liaisons between the regulatory agencies and VW until 2015

None of the employees were members of VW’s management board. However, several reported to the board.

According to the indictment [PDF] returned by a federal grand jury in the Eastern District of Michigan, VW engineers began working on the defeat devices in 2006, and each of the charged individuals had a hand in the creation, implementation, or coverup of the software.

Specifically, the indictment claims that engineers working under Dorenkamp and Hadler designed and implemented software to recognize whether a vehicle was undergoing standard U.S. emissions testing or it was being driven on the road under normal driving conditions.

If a vehicle was found to be undergoing testing the software would ensure that the emissions control system was active. With regular road use the system was turned off, allowing the vehicle to emit up to 40 times the allowable nitrogen oxygen levels.

Authorities charge that Hadler authorized Dorenkamp to proceed with the project knowing that only the use of the defeat device software would enable VW diesel vehicles to pass U.S. emissions tests.

Starting with the first model year 2009 of VW’s new “clean diesel” engine through model year 2016, Dorenkamp, Neusser, Hadler and their co-conspirators installed or allowed for the installation of the software.

The defendants, according to the DOJ, then concealed the defeat devices and true emissions levels from U.S. customs, customers, and federal regulators in order to import the vehicles into the U.S.

Gottweis became aware of the defeat devices in 2012, when engineers found that increased stress on the exhaust system was causing hardware failures in diesel vehicles. At this point, they informed Gottweis of the defeat device.

Instead of removing the devices, the engineers instead altered them to include “steering wheel angle recognition feature.”

After the defeat devices were uncovered by the University of West Virginia’s Center for Alternative Fuels, Engines and Emissions, the defendants provided EPA and the California Air Resources Board with information that attempted to blame the devices on innocent mechanical and technological problems.

Each of the employees are charged with one count of conspiracy to defraud the United States, defraud VW’s U.S. customers and violate the Clean Air Act by making false representations to regulators and the public about the ability of VW’s supposedly “clean diesel” vehicles to comply with U.S. emissions requirements.

Additionally, Dorenkamp, Neusser, Schmidt, and Peter are charged with violations of the Clean Air Act, while Neusser, Gottweis, Schmidt, and Peter are charged with wire fraud.

Earlier this week, Schmidt was arrested by the FBI while vacationing in Miami. The other men are believed to be residing in Germany currently.

U.S. Attorney General Loretta Lynch noted that the DOJ has previously worked with German authorities to resolve criminal issues against German residents, but said it was too early to know how the VW allegations would be resolved.

While the settlement announced Wednesday, and the indictments, conclude another chapter of VW’s “Dieselgate” scandal, Lynch said the criminal investigation continues and that additional employees could face charges in the future.

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