Lawsuits Against Volkswagen Using Mob-inspired Law to Takedown Automaker

Complaints filed against Volkswagen of America are using the Racketeer Influenced and Corrupt Organizations Act to allege that the automaker knowingly committed fraud across state lines, court documents show.

The law, which was created in the 1970s to take down the U.S. mafia, could have serious ramifications for Volkswagen, who admitted that its cars illegally polluted.

Accusing the automaker of violating RICO Act would mean that lawsuits against the automaker could be more lucrative and amplify damage to the automaker.

According to Rick Wynkoop, an automotive attorney in Denver, plaintiffs suing Volkswagen for violating RICO statutes have a higher burden of pleading than an ordinary case. The claims need to be specifically targeted, such as fraud.

In a Southern California case filed against Volkswagen, the plaintiffs accused the automaker of some serious mob shiz:

VW AG directed VW America to engage in fraudulent activities that affected interstate commerce, which included obtaining fraudulent certificates of conformity from the EPA and the design, manufacture, testing, sale and distribution of the Defective Vehicles to consumers all over the United States. VW AG used VW America to manufacture and sell the Defective Vehicles throughout the United States with defeat devices that purposefully circumvented federal and state emissions laws, and VW America operated its largest emissions testing center in California. …

and

In devising and executing the illegal scheme, the (Volkswagen) devised and knowingly carried out a material scheme and/or artifice to defraud (VW owners) or to obtain money from (VW owners) by means of materially false or fraudulent pretenses, representations, promises, or omissions of material facts. For the purpose of executing the illegal scheme, the (Volkswagen) committed these racketeering acts, which number in the thousands, intentionally and knowingly with the specific intent to advance the illegal scheme.

So, basically, Volkswagen and the mob are the same thing, according to court documents.

The RICO Act has been used increasingly to take down corporations in the past few years, so the charges aren’t entirely unfounded. The U.S. Department of Justice recently said worldwide soccer officials from FIFA violated RICO laws by using influence and power to extort bribes from other countries.

(In both cases, the Justice Department and plaintiffs suing Volkswagen have the difficult task of proving some of our laws are applicable overseas, something that the U.S. Supreme Court hasn’t thought so highly of.)

The charges against VW aren’t completely unfounded. In September, the Justice Department charged General Motors with wire fraud in connection with its defective ignition switches that resulted in 124 deaths. Under RICO statues, wire and mail fraud would need to be proved by the plaintiffs — perhaps by emails found on seized computers? — with two incidents over a 10-year period to constitute a “pattern.”

But if proven, Wyknoop points out, the RICO allegations could mean Volkswagen would pay significantly more to the plaintiffs.

“It’s a tougher claim to prove, but RICO provides for treble damages and attorney fees. It’s a powerful tool to go against businesses that break the law. Really hasn’t changed much since they went after mob with it back in the ’70s,” he said.