The investigation into diesel emissions cheating by Volkswagen’s luxury arm Audi has taken a new turn with charges filed on both sides of the Atlantic, and an arrest made in Germany.
Sixty-year-old Giovanni Pamio becomes the eight person charged by the U.S. Justice Department for participating in an extensive scheme to rig diesel engines used by various diesel brands. That scam is expected to cot Volkswagen at least $30 billion in fines, fees and a broad buyback of vehicles that cannot be brought up to legal standards in the U.S. and a number of other markets.
While prosecutors in Germany and the States initially focused their efforts on the Volkswagen brand, they have begun expanding the investigation to look at the role other VW marques played in the scandal, notably Audi. Prosecutors in Munich, for one thing, conducted a number of raids on Audi and VW offices in March, as well as targeting the offices of a law firm representing the luxury brand. And they have now arrested an as yet-unnamed Audi employee.
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VW’s diesel scheme began unraveling in September 2015, when the U.S. Environmental Protection Agency accused VW of rigging a 2.0-liter turbodiesel to reduce emissions during testing. In real-world conditions, however, it would produce up to nearly 40 times the allowable limit of pollutants such as smog-causing oxides of nitrogen. Within weeks, the automaker acknowledged the scam and subsequently admitted rigging a more upscale 3.0-liter turbodiesel used by the VW, Audi and Porsche brands.
One former VW employee pleaded guilty in federal court last year. When the Justice Department announced a criminal settlement with Volkswagen in January, it announced six more indictments, though only one person has since been arrested. Pamio joins the list of those facing criminal prosecution though, at this moment, prosecutors have not indicated where he is or whether he will actually be able to be brought to justice. Five of those previously indicted in the States are in Germany and not eligible for extradition.
Prosecutors allege Pamio, who headed thermormodynamics in Audi’s Diesel Development Department in Neckarsulm, Germany “directed Audi employees to design and implement software functions to cheat the standard U.S. emissions tests,” and then ordered subordinates to falsify reports provided to the EPA indicating the diesels used by Audi – which included both the 2.0- and 3.0-liter engines – legally met emissions mandates.
The person arrested in Germany has so far been unidentified. It is not clear if that move targeted Pamio or another Audi employee, prosecutors there declining to provide information or even confirm whether the arrest came at the behest of American officials.
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A spokesperson for Munich authorities did not that the arrest was the result of an ongoing probe and came as the result of “findings following searches.”
Information that has come out as part of the European and American probes indicate that Pamio was part of a group within the broader Volkswagen enterprise that developed the system to rig diesel engines. It has been reported that some Audi managers declared the approach “indefensible,” though Pamio later said it would be “too risky!” to disclose the rigging to American authorities.
It has yet to be clearly shown how far up the corporate ladder approval came from to move forward. Munich prosecutors this week said no members of the Audi board are under investigation. That appears to give something of a pass to CEO Rupert Stadler, who has taken heat for the diesel scandal.
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