04/05/2018

Ex-VW CEO charged over diesel scandal

Reuters reports that the U.S. Justice Department has filed criminal charges against former Volkswagen AG chief executive Martin Winterkorn

The indictment, which accuses Martin of conspiring to cover up the German automaker's diesel emissions cheating was filed in secret in March but was revealed this week at Volkswagen's annual meeting. Martin resigned in September 2015.

U.S. attorney general Jeff Sessions, environmental protection administration chief Scott Pruitt and other senior Trump administration official issued statements criticizing VW with the indictment, 'If you try to deceive the United States, then you will pay a heavy price,' Jeff said.

According to Reuters, former CEO Martin is unlikely to face trial in US, instead seeking protection under German extradition law, he is however being investigated by German authorities.

A source close to Winterkorn told Reuters on Friday that Winterkorn is in Germany, and will remain there.

Volkswagen settled criminal charges with the U.S. Justice Department in 2017 and agreed to a $4.3bn payment. In total, VW has agreed to spend more than $25bn in the United States to address claims from owners, environmental regulators, states and dealers as well as offering to buy back around 500,000 US vehicles.

Martin, 70, is charged with four felony counts, including conspiracy to defraud the United States, wire fraud and violating the Clean Air Act from at least May 2006 through November 2015.

A lawyer for Winterkorn in Germany did not immediately comment. Winterkorn in January 2017 told German lawmakers he had not been informed of the cheating early and would have halted it had he been aware.

In 2017, Volkswagen said of the decision to install illegal software manipulation devices, 'None of the members of the board of management had, at that time and for many years to follow, knowledge of the development and implementation of this software function.'

The indictment describes a July 27, 2015 meeting at which Volkswagen employees presented PowerPoint slides to Winterkorn and 'other senior VW AG management at an in-person meeting at VW's headquarters in Wolfsburg,' and according to prosecutors, he agreed with other senior VW executives 'to continue to perpetrate the fraud and deceive U.S. regulators.'

In total, nine people have been charged and two former Volkswagen executives have pleaded guilty in the case and been sentenced to prison terms. One Italian citizen, former Audi manager Giovanni Pamio, is in Germany awaiting extradition.

Six former Volkswagen executives charged, including Winterkorn, are believed to be in Germany and have avoided facing U.S. prosecutors.

Three executives who were on the management board of Volkswagen at the time the scandal broke continue to hold senior positions within the company.