Volkswagen Pleads Guilty to Criminal Charges, Will Pay $4.3 Billion Fine

Steph Willems
by Steph Willems

The Volkswagen diesel emissions saga has reached a logical legal conclusion. The automaker entered a guilty plea in a Detroit federal courtroom this morning, admitting to a vast, 10-year conspiracy to fool environmental regulators through the use of emissions-cheating defeat devices.

As penance, Volkswagen AG must now pay $4.3 billion in criminal fines and civil penalties. That sum can now be added to the multi-billion U.S. buyback of hundreds of thousands of 2.0- and 3.0-liter diesel vehicles manufactured since 2009. While the penalties would be a bitter pill for any automaker to swallow, it’s a fraction of the fine allowed under federal guidelines.

Had the court pursued it, it might have sparked a brand fire sale down at Volkswagen Group.

The plea entered by Manfred Doess, Volkswagen’s general counsel, was accepted by U.S. District Court judge Sean Cox.

“It is pleading guilty because it is guilty of all criminal counts,” said Doess when asked by Cox why the company entered the plea. Under existing laws, the federal government could have hit VW with a fine ranging from $17 billion to $34 billion.

While he didn’t name names, Assistant U.S. Attorney John Neal did dole out harsh words.

“This was a premeditated crime that went to a very high level in the corporate structure,” he said, adding the company destroyed documents to cover traces of its crimes. The plan to deceive the U.S. government was a “very calculated and well-thought-out offense,” he claimed.

By coming clean, the automaker helped lower its financial burden. VW has agreed to spend three years under the watchful eyes of an independent monitor, a move that led Neal to lower the criminal fine portion to $2.8 billion. Last year, the automaker admitted it might have to sell off some of its brands if penalties rose above a certain amount.

Sentencing has been set for April 21.

While the company has chosen to bite the bullet in the face of overwhelming evidence, the saga isn’t over for executives embroiled in the scandal. Six former and current executives were indicted earlier this year on conspiracy charges, with one, Oliver Schmidt, recently arraigned on charges of violating the Clean Air Act.

Investigations continue in VW’s home country. The company’s former CEO, Martin Winterkorn, is under investigation by German prosecutors who question his level of knowledge of the defeat device plot. A former employee has also accused Audi CEO Rupert Stadler of complicity in the deception.

[Source: The Detroit News]

Steph Willems
Steph Willems

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  • Brn Brn on Mar 10, 2017

    but, but, but.... What about the few rogue engineers that who are truly at fault for the scandal????

  • Jthorner Jthorner on Mar 11, 2017

    Criminal executives need to be doing jail time. We see the same story over and over again: 1) Executives commit massive white collar crimes to spike their bonuses. 2) Eventually found out. 3) Company pays multi-billion dollar fines. 4) Executives keep all of their bonuses. 5) Nobody does jail time.

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