On Thursday, the US Department of Justice (DOJ) unsealed a secret March indictment charging Martin Winterkorn, former Volkswagen CEO, with conspiracy to defraud the US government and customers, wire fraud, and conspiracy to violate the Clean Air Act.
The charges stem from the VW Group diesel emissions scandal that broke in 2015. The company already pleaded guilty to various related charges in US federal court, and it has paid out billions of dollars in fines and buybacks to former customers.
The emissions scandal arose when Audi, VW, and Porsche diesel models were discovered to contain illegal software that suppressed the emissions control system when the driver was on the road. If the car was being tested in a lab, however, sensors would tell the car to keep the emissions control system engaged. The result was that VW Groups so-called “clean diesel” vehicles were actually emitting nitrogen oxide (NOx) far in excess of the legal limit.
In the aftermath of revelations about Volkswagens emissions test cheating, Volkswagen publicly stated that the illegal software had been placed on the cars by “rogue engineers” and that company executives were not involved or culpable. Documents later surfaced tying several executives to statements imploring colleagues to “come up with the story please!” when regulators started asking questions. A civil case lodged in 2016 by several states alleged that Winterkorn had been made aware of the illegal software (called a “defeat device” in Environmental Protection Agency parlance) early on at Volkswagen, although at the time he was not personally charged with any wrongdoing.
This latest indictment changes that. Winterkorn, 70, has been named as a co-conspirator along with five other men who were named in an earlier federal indictment along with Oliver Schmidt, a former Volkswagen executive. Schmidt was in charge of emissions compliance for Volkswagen cars in the US, and he was arrested while on vacation in Miami in 2016. The executive was sentenced to seven years and a $400,000 criminal penalty in December.
The indictment unsealed today says that around March 2014, Winterkorn learned of a study taking place at West Virginia Universitys Center for Alternative Fuels, Engines, and Emissions that showed that VW diesel vehicles were giving off emissions beyond legal limits.
In May, a VW Executive sent a memo to Winterkorn explaining the situation which stated, “a thorough explanation for the dramatic increase in NOx emissions cannot be given to the authorities.” The memo predicted that the US would open an investigation into the discrepancy.
When such an investigation did open up, the indictment charges that Winterkorn and other executives “pursued a strategy of concealing the defeat device in responding to questions from US regulators, while appearing to cooperate.”
In July 2015, when the US threatened not to re-certify Volkswagen diesels because their emissions numbers were so off, Winterkorn asked his employees for a briefing on the situation. A PowerPoint presentation was allegedly created, detailing exactly how VW was deceiving regulators “including precisely what information had been disclosed to US regulators and what information had not yet been disclosed.”
The indictment charges that Winterkorn then instructed Schmidt and another VW employee to continue to deceive US regulators at a follow-up meeting in August, “using excuses such as irregularities and abnormalities for the discrepancy.”
The five men that were indicted with Schmidt and mentioned again in this latest indictment of Winterkorn have not been arrested. All men are German citizens and are believed to be in Germany.
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Ars Technica
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