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Volkswagen Manager Arraigned on Diesel Charges in Detroit

Schmidt one of six managers being investigated.

by on Feb.23, 2017

Another former Volkswagen executive was arraigned in court: one of six under investigation.

One of the six Volkswagen executives at the center of the automaker’s diesel emmissions scandal, Oliver Schmidt, pleaded not guilty in federal court in Detroit today.

Schmidt, 48, who was arrested in Miami while traveling from Cuba to Germany, is accused of being part of a collaborative effort to intentionally develop a device that could cheat on U.S. emissions test.

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The “cheat devices” allowed VW’s diesels to pass emissions tests in a lab, but then would shut off when the vehicles weren’t in “test mode.” This allowed for better fuel economy results, but the emissions levels could be as high as 40 times what’s allowable by law.

Formerly the general manager that worked with U.S. regulatory agencies from 2012 to February 2015, Schmidt returned to Germany at that time, then left the company that fall.

He’s been part of an ongoing FBI investigation surrounding the scam. The query involves two unnamed cooperating witnesses and a third VW employee, James Liang, who pleaded guilty in September to conspiracy for his role in the emissions scandal. In all, six former VW employees have been indicted.

(VW bill rises to $25 billion in the U.S. Click Here to see how.)

Schmidt was indicted on 10 counts that include violations of the Clean Air Act and wire fraud, which could net him a possible sentence of 149 years in prison; however, that’s unlikely as judges rarely force prisoners to serve sentences consecutively.

Since U.S. regulatory officials discovered the device, Volkswagen has been trying to make amends with the American public as well as government agencies. The automaker has agreed to spend more than $17 billion to buyback vehicles or repair its 2.0-liter and 3.0-liter diesels on Volkswagens, Audis and Porsches in the U.S.

(Latest VW diesel deal could be more costly than expected. Click Here to learn why.)

Additionally, it’s agreed to a $4.3 billion settlement with U.S. regulatory agencies for the impact of the company’s deception. It’s expected to plead guilty – corporately – to criminal charges filed by the Department of Justice in the weeks ahead.

The company still faces claims from investors, lawsuits from some U.S. states as well as owners who opted out of the class-actions settlement. Additionally, the U.S. Securities and Exchange Commission and German prosecutors are still investigating the automaker.

(Who knew what and when: top VW managers turning one another. To see the story, Click Here.)

Volkswagen continues to deny claims by its former chairman, Ferdinand Piech, that other top company managers covered up its diesel emissions scandal. Piech reportedly told authorities he had advised board members about the subterfuge long before it was publicly revealed. In particular, Piech’s testimony appears to focus on Martin Winterkorn, the CEO forced out of the company in September 2015.

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