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U.S. charges Volkswagen ex-CEO in diesel-cheating case

U.S. charges Volkswagen ex-CEO in diesel-cheating case
Volkswagen ex-CEO Martin Winterkorn is the highest-ranking person to be charged in the diesel emissions cheating investigation, but he's unlikely to ever face trial in the United States. (Michael Sohn / Associated Press)

Volkswagen AG's former Chief Executive Martin Winterkorn was charged in a Michigan federal court with conspiracy and wire fraud in relation to an investigation into the German automaker's efforts to cheat U.S. diesel emissions testing, according to an indictment unsealed Thursday.

Winterkorn, who stepped down from his role as CEO days after the scandal was revealed, is accused of conspiring to defraud the United States and to violate the Clean Air Act. The charges were filed under seal in Detroit on March 14.

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"The indictment unsealed today alleges that Volkswagen's scheme to cheat its legal requirements went all the way to the top of the company," Atty. Gen. Jeff Sessions said in a statement. "These are serious allegations, and we will prosecute this case to the fullest extent of the law."

Winterkorn is the highest-ranking person to be charged in the three-year investigation, yet he's also unlikely to ever face trial in the United States. Germany doesn't extradite its citizens to countries outside the European Union, so Winterkorn won't be arrested unless he leaves the country.

Winterkorn's lawyer in Germany, Felix Doerr, didn't reply to an email seeking comment.

"Volkswagen continues to cooperate with investigations by the Department of Justice into the conduct of individuals," the company said in an emailed statement. "It would not be appropriate to comment on individual cases."

Defeat devices

VW admitted in September 2015 that it had outfitted about 11 million diesel cars worldwide with a defeat device — embedded software that enabled the vehicles to recognize when they were being tested in laboratory conditions and to reduce emissions to meet acceptable levels during the test. The indictment says that at a 2015 meeting in Wolfsburg, Germany, where the automaker is based, Winterkorn was briefed on the emissions issue and on how U.S. regulators were threatening to delay certifying 2016 cars for sale.

VW pleaded guilty in January 2017 to using false statements to import cars into the United States and to obstructing investigations, and it paid $4.3 billion in penalties. Two other employees have pleaded guilty over their role in the affair, and five other executives have been indicted by the United States and remain in Germany, avoiding arrest. They include executives who led engine development and the failed efforts to design a diesel engine that would meet the tougher emissions standards the U.S. adopted for 2007, as well as another liaison to U.S. regulators.

Volkswagen's new CEO, Herbert Diess, pledged earlier Thursday that the company would step up compliance systems to prevent the sort of misconduct that set off the deepest crisis in VW's history. Diess spoke for the first time in his new role as CEO at the company's annual shareholder meeting in Berlin after VW abruptly replaced Winterkorn's successor, Matthias Mueller, last month.

2015 meeting

VW Chairman Hans Dieter Poetsch said in Berlin that internal investigations into the roots of the scandal were ongoing and that VW "constantly explores" possible damage claims from employees that were involved in the cheating, including former board members.

The Winterkorn indictment focuses on the July 27, 2015, meeting in Wolfsburg, where Winterkorn and several other senior leaders were briefed about the diesel irregularities and how U.S. regulators were threatening to hold up certifying 2016 models. At that meeting, Winterkorn "approved the continued concealment of the cheating software from U.S. regulators," according to the indictment.

The wire fraud relates to August 2015 emails that Winterkorn was copied on regarding VW's attempts to deceive U.S. regulators through Oliver Schmidt, VW's compliance liaison, according to prosecutors. Schmidt pleaded guilty in 2017 and was sentenced to seven years in prison.

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