VW Dieselgate executive to finish prison time in Germany

Keith Laing
The Detroit News

A former Volkswagen executive sentenced to seven years for his role in the automaker’s emissions cheating scandal was cleared Thursday to leave federal prison in Michigan more than two years early and finish his jail time in his native Germany.

A federal magistrate in Detroit signed paperwork approving the extradition of Oliver Schmidt, 51, on Thursday. Schmidt filed a request two years ago to finish his sentence in Germany and there was no opposition at a virtual hearing held by the court on Thursday.

The extradition will result in the transfer of custody of the VW executive serving the longest sentence issued in arguably the largest and most expensive conspiracy in the global auto industry’s history.

Oliver Schmidt

Schmidt's transfer comes as Germany is expected to send to the U.S. another high-ranking auto executive, Audi engineering manager Axel Eiser, who was captured last month in Croatia. Eiser is facing federal charges in Detroit related to the scandal. 

The legal drama is unfolding five years after the diesel emissions scandal emerged and as several former VW executives have not been brought to justice in the U.S., including former CEO Martin Winterkorn.

Schmidt, who is currently being held at the federal prison in Milan, Mich., attended the video conference Thursday in federal court. The hearing was held to ensure that Schmidt consents to going back to Germany and understands the consequences.

The transfer is part of the Justice Department's International Prisoner Transfer unit, which oversees the transfer of prisoners between countries. Under terms of a treaty, Germany would assume responsibility for the rest of Schmidt's sentence.

Former VW engineer James Liang also applied to have his 40-month sentence transferred to Germany in 2018. It is unclear whether his request was granted; Liang was released from prison in November.

Schmidt was sentenced and fined $400,000 in December 2017 after pleading guilty to two charges in Volkswagen’s scheme to rig nearly 600,000 diesel cars to evade U.S. pollution standards.

Schmidt worked at the German automaker’s Auburn Hills offices from 2012 to February 2015, and was arrested in Florida for his alleged involvement in what came to be known as Dieselgate. He had a base salary of $130,000, received bonuses of at least $40,000, and had a net worth over $1 million. 

Staff writer Robert Snell contributed.