Volkswagen pleads guilty in US emissions cheating scandal

Bloomberg

Volkswagen AG pleaded guilty to misleading US regulators and customers by hiding emission levels on diesel vehicles and obstructing investigations when authorities grew suspicious. Sentencing was put off until April 21.
VW entered the formal plea in Detroit federal court as it agreed to do two months ago as part of a $4.3 billion deal to settle claims over the emissions scandal. Under the agreement with the US government, VW would pay a $2.8 billion fine and $1.5 billion in civil penalties.
The German automaker continues to wrestle with the fallout from its September 2015 admission that it rigged as many as 11 million diesel vehicles worldwide to cheat on emissions tests. It has set aside $23.9
billion to cover cheating-related expenses, with the largest share going to compensate US consumers. The company still faces investor lawsuits in the US and in Germany, as well as consumer lawsuits and a criminal probe in Germany.
US District Judge Sean Cox accepted the plea, but said in light of the “very, very serious” offenses, he wasn’t comfortable approving the sentencing agreement immediately. “I just want more time to reflect and study” he said, adding that he will refer the case to the probation office for a report prior to the sentencing hearing.
In arguing for the judge to accept the sentencing deal, VW’s lawyer Jason Weinstein said the company has acted swiftly to make things right with its customers, dealers and the US Environmental Protection Agency. The automaker resolved those cases before the criminal settlement and it directed the law firm investigating the matter to share findings with the government “essentially in real time,” allowing for swift prosecution of individual employees, he said.
As part of the deal with the US, VW would be on probation and under an independent monitor for three years. “Volkswagen deeply regrets the behavior that gave rise to the diesel crisis,” the company said in an emailed statement after the hearing.
So far seven people have been charged with crimes for their alleged roles in the emissions scheme. Oliver Schmidt, the company’s liaison with US regulators, pleaded not guilty to charges of fraud and conspiracy in Detroit federal court on Feb. 24. Schmidt, a German national who has been in custody since his arrest in January, is expected to ask to be released on bond at a hearing March 16.
A seventh defendant, VW engineer James Liang, pleaded guilty in September to conspiring to defraud US regulators and consumers. Liang, who spent 25 years with Volkswagen in Wolfsburg before moving to the US in 2008, was involved in creating a defeat device so cars with 2.0-liter diesel engine could pass emissions tests. He’s cooperating with prosecutors.