Washington — Federal prosecutors are recommending a three-year prison sentence and a $20,000 fine for the former leader of Volkswagen's diesel competence program and pleaded guilty to a criminal charge in September for his role in the automaker’s diesel emissions scandal.
James Robert Liang, who is scheduled to be sentenced on Friday in the U.S. District Court in Detroit, entered a guilty plea to a grand jury indictment of conspiracy to defraud the U.S. government, to commit wire fraud and to violate the Clean Air Act. The maximum penalty for the charges was a five years in prison and a $250,000 fine.
Prosecutors cited Liang’s cooperation with the Volkswagen after his indictment as the reason for their recommended leniency
“As a longtime member of the conspiracy, Liang has given the government a firsthand perspective of the illicit objectives and motivations of VW and its employees,” the federal prosecutors wrote in a memo to the court that was released Friday. “Liang began to cooperate immediately, when the investigation was in its early stages, and the information he provided formed an important basis for the next investigatory steps.”
Liang became the first person to be charged in the scandal at the German automaker for his role in the diesel emissions scandal in September 2016. He was followed by six other present and former Volkswagen AG executives who were indicted in January 2017. Volkswagen was also charged as a company with three criminal felony counts for what regulators called a “10-year conspiracy” to rig hundreds of thousands of diesel cars to cheat U.S. emission standards. The company was forced to pay $2.8 billion in criminal fines and $1.5 billion in civil penalties related to the fraud.
Volkswagen has been under fire in the United States since it was accused by the U.S. Environmental Protection Agency in September 2015 of selling diesels for years with software that activated required air pollution equipment only during emissions tests. They had been marketed as “clean diesels” for the company’s Volkswagen, Audi and Porsche brands between 2008 and 2015.
The automaker has admitted to programming its diesel cars to trick emissions testers into believing the engines released far less pollution into the air than they actually do, in violation of the federal Clean Air Act. Regulators have said that in normal driving they emitted up to 40 times more smog-causing nitrogen oxide than the legal limit.
Volkswagen has stopped selling diesel cars in the U.S. since it admitted to the scheme.
The $4.3 billion fine comes in addition to a $14.7 billion settlement the company reached earlier this year with the EPA that calls for Volkswagen to spend $10 billion to either buy back or repair about 475,000 2-liter diesel vehicles that were sold between 2009 and 2015 and were built with devices to trick emissions testers; the company must contribute $4.7 billion to federal efforts to reduce pollution. The company also agreed to $1.2 billion deal that covered fixes and buy backs of 78,000 additional 3-liter cars.
The emission-cheating scheme has cost Volkswagen more than $20 billion in fines and settlements, in addition to goodwill among some U.S. drivers.
Volkswagen’s criminal and civil fines dwarf recent criminal penalties paid by General Motors Co. and Toyota Motor Corp. for safety violations. GM was forced to pay $900 million fine over its handling of vehicles with a dangerous ignition switch defect that was ultimately linked to 124 deaths and hundreds of injuries. And it is far more than the $1.2 billion that Toyota Motor Corp. was penalized for issuing misleading statements about cars that experienced unintended acceleration in 2014.
The federal government has authority to levy heavier fines for environmental violations under the Clean Air Act than the National Highway Traffic Safety Administration does for safety infractions. Congress has capped the transportation department’s ability to fine automakers is capped at $105 million. The limit was increased from $35 million in a 2015 transportation funding bill.