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VW Exec Pleads Guilty in Diesel Scandal

Schmidt becomes second VW employee to plead guilty.

by on Aug.04, 2017

Former VW manager Oliver Schmidt pleaded guilty in U.S. District Court in Detroit.

As expected, Volkswagen executive Oliver Schmidt pleaded guilty for his role in the German automaker’s diesel emissions scandal. The plea came today in U.S. District Court in Detroit.

He is the second VW employee to plead guilty to charges related to the diesel scam, 62-year-old James Robert Liang the first to do so last September.

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Schmidt is expected to face up to seven years in prison and a fine of between $40,000 and $400,000 after admitting to conspiring to mislead U.S regulators and violating clean air laws, as part of the plea agreement, according to Reuters.

In March, Volkswagen pleaded guilty to three felony counts under a plea agreement to resolve U.S. charges it installed secret software in vehicles to evade emissions tests and agreed to spend up to $25 billion to resolve various claims.

(VW penalized again for diesel gate scandal. Click Here for the story.)

The 48-year-old Schmidt was one of seven VW employees named in connection with the case. The indictments were released at the same time the Justice Dept. confirmed it had reached a criminal settlement with Volkswagen last January.

VW diesel engineer James Liang was the first to plead guilty in the VW diesel scam case.

A one-time senior engineer based in Michigan where he ran VW’s U.S. environmental operations, Schmidt was accused of helping to cover up the automaker’s efforts to rig two diesel engines so they would illegally pass emissions tests.

Since the ruse was uncovered in late 2015, the German automaker has had to pay out around $30 billion in fines, fees and for a buyback program covering about 500,000 vehicles sold in the U.S.

Schmidt was arrested while transiting through the U.S. after a vacation on his way home to Germany. The others indicted at the time remain in Europe and are not currently subject to extradition.

(Click Here for more about VW offering big deals on fixed diesel leftovers.)

In addition to its executives facing jail time, Volkswagen AG is facing a criminal investigation in Germany. Also the company has paid more than $25 billion in fines and fees as a result of the diesel scandal. The company has been impacted in other ways as well.

Volkswagen was told that it is no longer eligible for low-cost financing to help finance research and development from the European Investment Bank The bank’s decision, which is part of the fallout from the diesel scandal that engulfed the company two years ago, comes as carmakers are scrambling to find money in the hunt for new technology.

The hold on new loans came after the European Anti-Fraud Office, known as OLAF, concluded that Volkswagen misled authorities about how it used $472 million earmarked, at VW’s request, to help finance the development of cleaner more efficient engines.

The report found Volkswagen fraudulently secured the in loans from the European Investment Bank to develop the engine at the heart of the Dieselgate scandal, according to officials at OLAF.

(To see more about Schmidt’s plans to plead guilty in emissions scandal, Click Here.)

The loan was supposed to help the world’s biggest carmaker develop an engine that would comply with increasingly stringent emissions rules in the EU and the U.S. The EU investigators concluded that VW secured the loan by “fraud” and “deception.”

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One Response to “VW Exec Pleads Guilty in Diesel Scandal”

  1. Jim says:

    Hopefully the plea requires Schmidt to provide a list of top management who were aware of the scam.