Detroit — A federal judge could grant bond Thursday to a former high-ranking Volkswagen AG executive indicted for his role in the automaker’s diesel emissions scandal.
Oliver Schmidt, 48, a German national and VW’s former top emissions compliance manager for the United States, has been jailed since January. He was arrested in Florida and has been in federal custody awaiting trial in one of the largest alleged corporate criminal schemes in U.S. history.
The hearing in front of U.S. District Judge Sean Cox on Thursday comes six days after Volkswagen AG pleaded guilty to three criminal charges related to the automaker’s decade-long conspiracy to rig nearly 600,000 diesel cars and cheat U.S. emission standards.
The hearing is expected to offer conflicting views on whether Schmidt might flee to Germany if released on bond.
Schmidt will not flee because he would face financial and professional ruin, and be shadowed by an Interpol arrest warrant, defense lawyer David DuMouchel wrote in a court filing.
“He would be unemployable because he would be followed wherever he goes by an Interpol red notice and the countless photographs of him published in papers around the world in connection with this case,” the lawyer wrote.
Schmidt could be forced to surrender his passport, be confined to a friend’s house in Metro Detroit, wear a GPS tether and pay a substantial bond, DuMouchel argued.
Schmidt has considerable assets, including $433,000 in equity from seven U.S. rental apartments and friends have offered to secure his release with $110,000 worth of real estate, his lawyer said.
Volkswagen’s insurance carrier also has loaned $500,000.
Schmidt should not be released because he has no family in the U.S., has minimal ties here and is a resident of Germany, which lacks an extradition agreement with the U.S., prosecutors said. If convicted, he faces up to 20 years in federal prison, an effective life sentence that helps justify keeping Schmidt behind bars, the government claims.
“Although the defendant postures himself as a ‘cooperator,’ the defendant lied to government investigators to protect himself, and the government has obtained evidence showing that he deleted documents material to this investigation,” Assistant U.S. Attorney John Neal wrote in a court filing.
Schmidt, who worked in VW’s Auburn Hills offices from 2012 to February 2015, is charged with conspiracy to defraud the United States, violating the Clean Air Act and aiding and abetting wire fraud.
In all, six current and former VW executives were indicted in what regulators called a 10-year conspiracy to rig thousands of diesel cars to evade emission standards.
Also charged in the case are: Heinz-Jakob Neusser, Jens Hadler, Richard Dorenkamp, Bernd Gottweis and Jürgen Peter, all of Germany. They remain at large with arrest warrants issued.
Schmidt’s five co-defendants are charged with one count of conspiracy to defraud the United States.
James Liang, leader of diesel competence for VW from 2008 through June, pleaded guilty to a criminal charge in Detroit in September and is expected to be sentenced May 3.
Jennifer Chambers contributed.