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Volkswagen Pleads Guilty In Diesel Emissions Scandal

March 10, 2017 0 Comments

Volkswagen has plead guilty to fraud, obstruction of justice and falsifying statements as part of a $4.3 billion settlement reached with the U.S. Justice Department in January over the automaker’s diesel emissions scandal.

A VW spokesperson told Reuters that this is the first time the company has plead guilty to criminal conduct in any court in the world. The automaker is now striving to put the most expensive ever auto industry scandal behind it.

The guilty pleas accepted by District Judge Sean Cox settle claims by the EPA and U.S. Customs and Border Protection for VW’s importation of almost 590,000 turbodiesel vehicles that violated clean air regulations. However, at the end of the 70 minute hearing, the judge said that he wanted more time to consider the settlement’s $4.3 billion in fines and other actions given the “serious nature” of the crimes.

If VW hadn’t settled, it would have faced potential fines of between $17 billion and $34 billion. Cox scheduled a sentencing hearing for April 21 at 9:30am.

“Volkswagen deeply regrets the behavior that gave rise to the diesel crisis,” the company said in a statement. “The agreements that we have reached with the U.S. government reflect our determination to address misconduct that went against all of the values Volkswagen holds so dear. Volkswagen today is not the same company it was 18 months ago – the change process under way is the biggest in our history. We have taken significant steps to strengthen accountability, increase transparency and transform our corporate culture.”

VW has agreed to spend up to $10 billion to buy back diesels that emit up to 40 times legally allowable pollution, along with at least $5,100 per owner in additional compensation. Cox said he was considering a motion made by a lawyer for some owners on whether to allow additional restitution for victims.

“This is a very, very, very serious crime,” Cox said. “It is incumbent on me to make a considered decision.”

Under the plea agreement, VW agreed to sweeping reforms, new audits and oversight by an independent monitor for three years. An assistant U.S. attorney, John Neal, told the court that the emissions scheme “was a well thought-out, planned offense that went to the top of the organization.”

In late 2015, VW halted sales of diesel vehicles, and has said it has no plans to resume sales of new U.S. diesels.

VW still faces ongoing investigations stemming from the excess emissions by the U.S. Securities and Exchange Commission, Internal Revenue Service and some U.S. states. New York Attorney General Eric Schneiderman told Reuters last month that there have been recent settlement talks, but didn’t elaborate on any details.

The Justice Department also charged seven current and former VW executives with crimes related to the scandal. One executive is in custody and awaiting trial, while another pleaded guilty and agreed to cooperate. U.S. prosecutors said in January that five of the seven are believed to be in Germany, and they have not been arraigned. German prosecutors also have an ongoing criminal probe into VW’s excess diesel emissions.

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