Volkswagen Fined $2.8B Over Emissions Scandal

U.S. District Judge Sean Cox has accepted a plea agreement that allows Volkswagen to pay a $2.8 billion criminal fine for purposely cheating on greenhouse gas emissions tests. The $2.8 billion fine is part of a larger $4.3 billion settlement reached between Volkswagen and the U.S. Justice Department in January. Attorneys for both the German automaker and the Justice Department had asked Cox to accept the plea.

Cox called the case a “deliberate massive fraud perpetrated by Volkwagen’s management.” Six weeks ago, VW pleaded guilty to criminal charges over software on its diesel vehicles that was programmed to turn on pollution controls during emissions testing and off while on the road. The company pleaded guilty to conspiring to defraud the U.S. by violating the Clean Air Act, obstructing justice during the government’s investigation, and a charge of entry of goods by false statement. VW’s offenses spanned a decade and involved nearly 600,000 diesel cars in the U.S.

The automaker spent months trying to conceal the device after questions arose at the California Air Resources Board over the true levels of emissions emitted by its diesel vehicles. Roughly 40 employees at Volkswagen and Audi were found to have destroyed thousands of emails and documents in the days before the company admitted wrongdoing. The U.S. Environmental Protection Agency officially charged the automaker with wrongdoing in September 2015.

The $4.3 billion settlement was only a fraction of penalty that U.S. law allowed, but lawyers for the U.S. Department of Justice argued a month ago that was adequate. U.S. Attorney John Neal said the lower figure was sufficient because the company cooperated with the government and helped move the investigation along swiftly. VW has also agreed to pay civil settlements of as much as $17 billion to U.S. consumers and dealers.

The penalty appears to be the largest ever paid by an automaker in the U.S. Cox said he hopes the fine will send a message to other companies not to act in similar ways. Seven employees have also been charged with crimes in the U.S. The German government has been urged to prosecute those responsible for the deliberate fraud.

Cox overruled several objections to the plea agreement, pointing to the availability of a separate multi-billion civil settlement for the individual owners of the affected cars as resolving the raised issues. Cox noted that low-level employees were hurt the most by the actions taken by the company, saying that they “likely will not get bonuses or raises because of the financial burden caused by actions of higher ranking company officials.” Under the terms of the agreement, VW is to be overseen by a federal monitor for a specified time period.

During the hearing, Manfred Doess, the automaker’s general counsel, apologized again on behalf of the automaker. Doess said, “This conduct was not consistent with the values of this company and plain and simple it was wrong. We let people down and for that we are deeply sorry. Volkswagen today is not the same company that it was 18 months ago.” Doess also said Volkswagen is taking the necessary steps to make sure nothing like this happens again.

 

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