VW pleads guilty to Dieselgate felonies

Jennifer Chambers
The Detroit News

Volkswagen AG pleaded guilty to three criminal charges on Friday for its 10-year conspiracy to rig hundreds of thousands of diesel cars to cheat U.S. emission standards. But the judge in the case asked for more time to sentence the German automaker.

Attorneys for both the government and Volkswagen asked U.S. District Court Judge Sean Cox in Detroit to accept the plea and immediately sentence the company, which under the terms of a plea agreement would pay $2.8 billion in criminal fines and $1.5 billion in civil penalties in the case.

Cox said he would hold off on sentencing -- including the final determination of fines and penalities -- until April 21 because the offense was “very, very serious.”

“It’s incumbent on me to make a considerate decision,” he said, “and ... I just want more time to reflect and study...”

Before issuing a sentence, Cox is expected to consider an objection filed in the case by an attorney for victims in the emissions scandal.

Birmingham attorney Craig Hilborn asked Cox to reject the government’s plea deal for the international automaker because it lacks any court-ordered restitution for victims and does not charge Volkswagen Group of America with a crime. Cox did not rule on the objection Friday.

Manfred Doess, VW’s general counsel, appeared before Cox to plead guilty on behalf of the company to conspiring to defraud the United States by violating the Clean Air Act, obstructing justice during the government’s investigation and a charge of entry of goods by false statement.

The government said Volkswagen conspired to enrich itself by deceiving U.S. regulators to get the necessary certificates to sell VW and Porsche cars in the United States knowing those vehicles did not meet U.S. emission standards.

Assistant U.S. Attorney John Neal told Cox that federal guidelines in the case called for a fine between $17 billion and $34 billion, based on the depth of the company’s conspiracy.

“This was a premeditated crime that went to a very high level in the corporate structure,” he said, adding it was a “very calculated and well-thought out offense.”

Neal said VW did not disclose its illegal behavior and it obstructed the government’s investigation of the company by destroying documents and data after learning of the probe.

But because VW did disclose its own obstructive conduct to the government and agreed to a three-year independent monitor, the government believes the criminal penalties should be reduced to $2.8 billion.

Cox asked Doess why the company was pleading guilty. “It is pleading guilty because it is guilty of all criminal counts,” Doess replied.

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.

Six current and former VW executives have been indicted in criminal cases.

Wolfsburg-based Volkswagen AG is the parent company of Volkswagen Group of America.

Last month, a former high-ranking Volkswagen AG executive was arraigned on criminal charges in connection with the scandal.

Oliver Schmidt, 48, a German national, is charged in a superseding indictment with conspiracy to defraud the United States; violating the Clean Air Act; and aiding and abetting wire fraud. Schmidt was once responsible for the company’s compliance with U.S. emissions regulations. He faces up to 20 years in prison on the wire fraud charges.

On Friday, U.S. Sens. Richard Blumenthal, D-Conn., and Edward J. Markey, D-Mass., issued a joint-statement after the plea, saying the VW executives must be held responsible for their actions.

“VW rightfully pleaded guilty today following a years-long campaign of deception, deceit and pollution. The Department of Justice should continue to vigorously pursue its criminal investigation against VW executives who knowingly and intentionally misled regulators, polluted our air, threatened people’s health and deceived consumers,” the statement said.

The president of Public Citizen, a Washington, D.C.-based nonprofit consumer advocacy group, issued a statement Friday asking for higher criminal penalities in the case.

“The civil justice system has forced Volkswagen to make amends to consumers, but this intentional, long-running fraud requires tough criminal penalties as well,” President Robert Weissman said.

“Government prosecutors were right to force Volkswagen to plead guilty to multiple felonies... but they should have imposed the fines closer to those called for by the sentencing guidelines, which would have been five to almost 10 times higher.”