By on December 16, 2015

Matthias Müller

The European Union’s anti-fraud office is investigating Volkswagen for misusing publicly funded loans to develop illegally cheating software in its cars, the New York Times reported Wednesday.

Volkswagen was provided the low-interest loans by the European Investment Bank to develop engines that were more fuel-efficient and produce less carbon dioxide, according to the report. In September, the automaker admitted that 11 million vehicles worldwide polluted more than advertised and used an illegal “defeat device” to fool emissions tests.

The automaker’s woes compounded Wednesday: A European bank — partly funded by the U.S. — announced it would suspend a $327 million loan to Volkswagen that would have been used to build a $1.2 billion factory in Poland. That factory was slated to build commercial vehicles.

According to Deutsche Welle, the Luxembourg-based European Investment Bank has loaned Volkswagen more than $5 billion since 1990. Volkswagen has yet to repay roughly $2 billion of those loans back to the bank, said the report. Those loans were provided to the automaker, in part, to produce more efficient cars worldwide.

If that’s not enough to ruin VW’s hump day: The European Union will likely announce Thursday that it will open its own investigation of Volkswagen’s worldwide cheating scandal, according to Reuters.

[Image: Volkswagen]

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