Ex-VW exec accused in emissions scandal denied release

Detroit — A Detroit federal judge on Thursday denied pretrial bond release of former Volkswagen AG executive Oliver Schmidt, indicted for his role in the automaker’s diesel emissions scandal, saying there is “serious risk” that Schmidt would not appear in court for trial now set for January 2018.

Judge Sean Cox heard arguments for about an hour on why Schmidt, a German national, should or should not be released.

Cox said he carefully considered the arguments, but said the court believes there are no conditions to a release that will assure Schmidt’s appearance for trial.

Defense Attorney David DuMouchel said Schmidt, 48, is not a flight risk.

“He’s not going to get out of here,” DuMouchel said. “He wouldn’t, and secondly he couldn’t.”

The defense had arranged for Schmidt and his wife to stay at a home in Rochester, for Schmidt to wear a tether and GPS tracker, stay confined to the home and surrender his passport. DuMouchel sought the release of his client on bond to help prepare for the charges he faces. He is charged with conspiracy to defraud the United States, violating the Clean Air Act and aiding and abetting wire fraud.

“There’s millions of documents, virtually all in German, and we have a limited time to digest … all these documents.” he said.

Schmidt’s supporters had collectively come up with about $1.6 million in assets, including more than $1 million in cash, to use toward bond, including most of his father’s life savings.

Assistant U.S. Attorney John Neal argued Schmidt has “little to keep him here in the United States” and that Germany does not extradite its citizens. Schmidt also has not been charged with a crime in Germany and it’s not clear if he will be, giving him a motive to go to Germany, Neal argued.

“If he flees to Germany, we could not get him back,” Neal said.

Cox also granted a motion that will delay Schmidt’s trial until Jan. 16, 2018. It had been slated to begin in April.

Cox said he would grant the new trial date, agreed upon by both parties, because the case is “very complex” and there are a number of defendants. “Defense needs more time to more adequately prepare its case for trial,” Cox said.

DuMouchel asked Schmidt if he understood that by moving the trial date, he was waiving his rights. Schmidt responded: “Yes, I agree to waive a speedy trial.”

Schmidt was brought into court in cuffs and wearing an orange Sanilac County jail jumpsuit.

Some supporters, including family and friends, were in tears following Cox’s decision. One unidentified man outside the courtroom said he was ashamed to be an American because of the judge’s decision.

Schmidt’s attorney DuMouchel declined to comment after the hearing and said his client’s family also declined comment.

Cox, during the court hearing, said he would allow Schmidt to be moved to the Milan facility on Thursday.

Schmidt is VW’s former top emissions compliance manager for the United States and 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 Thursday hearing came 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 evade U.S. emission standards.

Schmidt worked in VW’s Auburn Hills offices from 2012 to February 2015.

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. Five co-defendants are charged with one count of conspiracy to defraud the United States.

Another former Volkswagen executive already pleaded guilty. 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.

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