VW Executive Pleads Guilty To Part In Dieselgate Scandal

Image courtesy of Eric Arnold

Eight months after Oliver Schmidt — a former executive with Volkswagen’s regulatory compliance office — was arrested for his part in the company’s “Dieselgate” scandal, he has pleaded guilty to conspiracy and fraud charges. 

Schmidt pleaded guilty [PDF] Friday on charges of wire fraud and violation of the Clean Air Act, as well as a charge of conspiracy to defraud the U.S. and giving a false statement related to the more than 600,000 vehicles VW was accused of equipping with defeat devices.

Sentencing for Schmidt, who could face up to seven years in prison, is scheduled for Dec. 6, the Associated Press reports, adding that the former executive could be deported after his sentence is complete.

The Charges

Schmidt, who worked in the VW compliance office in Detroit from 2014 until March 2015, was arrested back in January.

He reportedly played a central role in trying to excuse the findings of the West Virginia study that first found VW vehicles included so-called “defeat devices” that skirted federal emissions standards.

The software was initially 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 (CARB), began further investigations into the issue.

According to the complaint against Schmidt, he and other executives agreed to defraud U.S. regulators and customers and violate the Clean Air Act, as they knew vehicles did not meet emissions standards and knew that defeat devices were being used to evade those standards.

Related: Feds Bring Criminal Charges Against 6 Volkswagen Executives

For his part, the complaint alleges that after the study was released in 2014, Schmidt tried to convince regulators that excess pollutants released by the vehicles when not undergoing emissions testing were the result of a technical issue, not any deliberate deception by the carmaker, the order against Schmidt claims.

“Schmidt attempted to and did mislead and deceive [California Air Resources Board] by offering technical reasons and excuses such as ‘irregularities’ or ‘abnormalities’ for the discrepancy without revealing the fundamental reason for the higher [nitrogen oxide] measurements on the road,” the complaint states.

Months after Schmidt’s explanations, VW admitted that 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 regular driving.

Other Players

Schmidt is the first of six former VW executives who were indicted [PDF] by federal authorities to plead guilty for his part in the scandal.

Back in January, federal authorities announced the indictment of six Volkswagen employees 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, 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.

While Schmidt was the first of the six to plead guilty, he was the second alleged Volks-villian to do so.

In Sept. 2016, James Liang, who worked at the carmaker in Germany and the U.S., pleaded guilty to conspiring to defraud regulators and customers.

Liang, who agreed to cooperate with the U.S. investigation into VW, was previously named as a developer of the defeat device in a lawsuit filed by New York Attorney General Eric Schneiderman in July.