By on January 9, 2017

Volkswagen TDI

A Volkswagen executive who allegedly spent more than a year throwing up smoke screens around the emissions-cheating automaker has been arrested in sunny Florida.

Oliver Schmidt, a former top emissions compliance manager assigned to the U.S., ran defense for the company in the long run-up to the diesel revelations. As allegations mounted and regulators began asking questions, Schmidt and other company officials blamed phony technical problems for the sky-high emissions levels seen during real-world testing.

According to the New York Times, Schmidt, a German national, was nabbed on Saturday and charged by the FBI with conspiracy to defraud the U.S. 

When the damning report on VW tailpipe emissions by the University of West Virginia first raised eyebrows in 2014, Schmidt was serving as general manager of VW’s Engineering and Environmental Office in Auburn Hills, Michigan. By March 2015, he had moved on to become a top deputy for VW’s head of engine development. (Schmidt joined the company in 1997.)

During questioning by the California Air Resources Board and Environmental Protection Agency, Schmidt explained that the test results weren’t unusual. At the time, he was in a position to know about the company’s defeat devices. The affidavit accuses the executive of being involved in a wide-ranging conspiracy lasting from about May 2006 until September 2015, and of knowingly lying to the regulators.

Schmidt clearly wasn’t alone in this. According to the Michigan federal district court filing, Schmidt was just one of several employees who knew about the emissions-cheating software and conspired to hush it up. All signs point to broad knowledge of the rigged 2.0- and 3.0-liter diesel engines used from 2009 onwards.

As it turns out, a familiar name helped in the investigation. James Liang, a VW engineer who has already pleaded guilty to conspiracy to defraud, is listed as the top “relevant individual” in the affidavit, joined by two unnamed employees from the company’s engine development department. The engineer, one of the architects of the device, recently saw his sentencing pushed back to free up time for his assistance in the investigation.

Blabbing about alleged co-conspirators apparently has its rewards.

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17 Comments on “Volkswagen’s U.S. Emissions Man Nabbed in Florida, Slapped with Conspiracy Charges...”

  • avatar

    If you or any of your IMF team should be caught or killed…

  • avatar

    What I can’t figure out is what he was still doing in the US. The NYT article helpfully pointed out that Germany generally does allow extradition of it’s own citizens. Given this, you’d expect that everybody involved would have fled back to The Fatherland without a second glance, with or without a job waiting for them at home.

    The indictment should not have come as a surprise; this is hardly a secret investigation, and they don’t even indict freely cooperating witnesses unless there is already indictments planned for the people said witness intents to roll on.

    I find it interesting in the indictment that they freely talked about keeping a certain unnamed engineer from attending a crucial meeting with CARB, “so he wouldn’t have to lie”. Said engineer attended anyway, and DIDN’T lie, meaning the proverbial gig was finally up. (Of course, given that apparently the EPA was sick and tired of VW’s excuses, and planning on withholding the ’16 emissions certs, one could say the gig was already up, and the only task remaining was the EPA discovering, one way or another, how much trouble VW was in.)

    It’s interesting that the indictment talks of multiple committees of “executives” being briefed on the situation, and buying into the “keep lying through our teeth” plan. Given the very small number of executives that have been fired so far, I have to wonder if it’s the fed’s exaggerating, VW not firing sufficient numbers of people, or another pile of indictments forthcoming.

    Also… Note to potential criminal conspirators: If you intend to conspire to lie to government agencies, it’s best not do do these things via helpfully-archived inter-office e-mails. They will not be helpful (to you) during your plea negotiations.

  • avatar

    Ah, so this is why Matthias Mueller didn’t bother going to the Detroit Auto show. Makes perfect sense now.

    • 0 avatar

      It wasn’t just Mueller that didn’t attend, none of the top execs bothered to come to Detroit for the auto show. In Mueller’s case you can make the argument that he didn’t want to return to the scene of his “interview” with NPR that went so badly the first time around, but there’s not really any plausible excuse for anyone else other than “we didn’t want to be arrested”.

  • avatar

    “You in a heap o’ trouble, boy!”

  • avatar

    Let the singing begin!

  • avatar

    He was promoted and went back to Germany in 2015. And now he willingly flew back to the US on his own? There’s something fishy here. He couldn’t possibly have been that stupid or naive to believe the federal government wouldn’t want a piece of him.

    Did he stage his own arrest as a way to cooperate with the FBI and get back at someone in Wolfsburg?

    • 0 avatar

      Never underestimate German arrogance….

    • 0 avatar

      This is an interesting theory. It seems like someone that had the position of top compliance officer would be a natural focal point for the EPA, and top dogs at VW might figure that he would be enough to satisfy the EPA’s appetite. If he (likely) figured this much out, and couldn’t get his bosses to protect him, then maybe he figures he can get a head start and promise bigger fish for them to fry in order to save his own hide.

      It’s difficult to believe even Germans can be that arrogant, but then again…

  • avatar

    That’z what happens when you ztrive for ze world domination in making cars. I’d say go for the top honcho, ex-CEO Mr. Winterkorn.

  • avatar

    Hang ’em high!

  • avatar

    This whole “scandal” is a huge crock.

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