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Found 203 results

  1. Former Volkswagen CEO Martin Winterkorn is already being investigated by German prosecutors over market manipulation because of the diesel emission scandal. But now, he finds himself under a new investigation by prosecutors on the suspicion of fraud. Reuters reports that prosecutors in Braunschweig believe Winterkorn knew about the cheat used on the 2.0L TDI well before the timeframe he has admittedly publicly. This suspicion comes as the result of numerous interviews with witnesses and suspects, along with raids on 28 houses and offices this week. "Sufficient indications have resulted from the investigation, particularly the questioning of witnesses and suspects as well as the analysis of seized data, that the accused (Winterkorn) may have known about the manipulating software and its effects sooner than he has said publicly," prosecutors said in a statement. At a hearing last week in Berlin, Winterkorn declined to say when he first learned about the cheat, citing the investigation being done by prosecutors. "For now, Dr. Winterkorn is sticking with the statement he made before a German parliamentary committee of inquiry (into the scandal) on Jan. 19," said Felix Doerr, a lawyer representing Winterkorn in an email to Reuters. Prosecutors also revealed that the number of people possibly involved in the scandal has risen from 21 to 37, including Winterkorn. Source: Reuters View full article
  2. Ever since Martin Winterkorn resigned from his post as Volkswagen Group CEO due to diesel emission scandal sixteen months ago, he has been out of the spotlight. However, Winterkorn made his first public appearance today at a parliamentary committee in Berlin investigating the emission irregularities of automobiles. At the hearing, Winterkorn maintained his innocence, saying he had no part in the cheating, nor knew anything about it. “It’s incomprehensible why I wasn’t informed early and clearly. I would have prevented any type of deception or misleading of authorities,” said Winterkorn. Winterkorn declined to answer questions dealing with when he was informed about the scandal, saying prosecutors are still investigating. The defense that Winterkorn is using (not having any knowledge about the scandal until the news broke) is very much at odds with his reputation of being a detail-obsessed executive. “It remains difficult to believe that such a dedicated engineer like Winterkorn wasn’t aware what was going on. And if he wasn’t, he neglected his duties as supervisor,” said Stefan Bratzel, an auto industry researcher at the University of Applied Sciences in Bergisch Gladbach, Germany to Bloomberg. There is also a fair amount of circumstantial evidence that shows Winterkorn knew about this. A year before the scandal broke, Winterkorn was alleged to get a memo talking about the investigation into the EA128 2.0L TDI engine. He claims that he never saw that memo. There is also the allegation that Winterkorn sat in a meeting discussing the investigation. Before leaving the hearing, Winterkorn apologized once again. “What happened makes people furious -- me too. I’m deeply upset that we disappointed millions of our customers,” said Winterkorn. Source: Bloomberg
  3. Ever since Martin Winterkorn resigned from his post as Volkswagen Group CEO due to diesel emission scandal sixteen months ago, he has been out of the spotlight. However, Winterkorn made his first public appearance today at a parliamentary committee in Berlin investigating the emission irregularities of automobiles. At the hearing, Winterkorn maintained his innocence, saying he had no part in the cheating, nor knew anything about it. “It’s incomprehensible why I wasn’t informed early and clearly. I would have prevented any type of deception or misleading of authorities,” said Winterkorn. Winterkorn declined to answer questions dealing with when he was informed about the scandal, saying prosecutors are still investigating. The defense that Winterkorn is using (not having any knowledge about the scandal until the news broke) is very much at odds with his reputation of being a detail-obsessed executive. “It remains difficult to believe that such a dedicated engineer like Winterkorn wasn’t aware what was going on. And if he wasn’t, he neglected his duties as supervisor,” said Stefan Bratzel, an auto industry researcher at the University of Applied Sciences in Bergisch Gladbach, Germany to Bloomberg. There is also a fair amount of circumstantial evidence that shows Winterkorn knew about this. A year before the scandal broke, Winterkorn was alleged to get a memo talking about the investigation into the EA128 2.0L TDI engine. He claims that he never saw that memo. There is also the allegation that Winterkorn sat in a meeting discussing the investigation. Before leaving the hearing, Winterkorn apologized once again. “What happened makes people furious -- me too. I’m deeply upset that we disappointed millions of our customers,” said Winterkorn. Source: Bloomberg View full article
  4. In 2005, Volkswagen was in dire straights. The company was going through a painful restructure and was looking into various ways to get itself back into shape. One of those ways was a possible deal with Daimler on possibly using their diesel technologies. But Volkswagen canceled the talks later that year and worked on their own diesel engines, which led to the cheating software and the mess it finds itself today. Bloomberg has learned from sources about a top-secret plan known as 'Project Tabletop'. The plan, spearheaded by then VW CEO Bernd Pischetsrieder, involved Volkswagen and Daimler possibly collaborating on projects and a possible deal where Volkswagen would get access to Diamler's BlueTec technologies for cleaning up diesel emissions by using urea injection. However, the talks were called off before an important meeting in August 2005. Sources claim that Volkswagen balked at cost of adding BlueTec to their vehicles - about 1,000 euros per car. Plus, VW couldn't lower production costs to compensate for. Instead, Volkswagen would go on its own and continue working on their TDI engines. This got strong internal support from then chairman Ferdinand Piech. But it also brought a fair amount on controversy to Volkswagen's top management. Some believed that Volkswagen wouldn't be able to meet the stringent U.S. standards for diesel vehicles without the BlueTec technologies. Sure enough, in 2006, Volkswagen would begin developing the software cheat that would reduce emissions when it detected specific conditions to know it was being tested. It is unclear if there is a link between the deal falling through and development of the cheat. Source: Bloomberg View full article
  5. In 2005, Volkswagen was in dire straights. The company was going through a painful restructure and was looking into various ways to get itself back into shape. One of those ways was a possible deal with Daimler on possibly using their diesel technologies. But Volkswagen canceled the talks later that year and worked on their own diesel engines, which led to the cheating software and the mess it finds itself today. Bloomberg has learned from sources about a top-secret plan known as 'Project Tabletop'. The plan, spearheaded by then VW CEO Bernd Pischetsrieder, involved Volkswagen and Daimler possibly collaborating on projects and a possible deal where Volkswagen would get access to Diamler's BlueTec technologies for cleaning up diesel emissions by using urea injection. However, the talks were called off before an important meeting in August 2005. Sources claim that Volkswagen balked at cost of adding BlueTec to their vehicles - about 1,000 euros per car. Plus, VW couldn't lower production costs to compensate for. Instead, Volkswagen would go on its own and continue working on their TDI engines. This got strong internal support from then chairman Ferdinand Piech. But it also brought a fair amount on controversy to Volkswagen's top management. Some believed that Volkswagen wouldn't be able to meet the stringent U.S. standards for diesel vehicles without the BlueTec technologies. Sure enough, in 2006, Volkswagen would begin developing the software cheat that would reduce emissions when it detected specific conditions to know it was being tested. It is unclear if there is a link between the deal falling through and development of the cheat. Source: Bloomberg
  6. Volkswagen will be cutting another big check. Today, the company announced that it had reached a settlement with Department of Justice over the criminal case on the diesel emission scandal. Volkswagen will plead guilty to three criminal felony charges and will pay $4.3 billion - $2.8 billion for the fine and $1.5 billion to settle civil cases. The settlement also requires an independent monitor to watch over the company for the next years. Volkswagen's board still needs to approve this settlement, but the company says the approval could happen today or tomorrow. If they waited, the parties would have to do it all over again with new people coming as part of President-elect Trump's team. “Today’s actions reflect the Justice Department’s steadfast commitment to defending consumers, protecting our environment and our financial system and holding individuals and companies accountable for corporate wrongdoing. In the days ahead, we will continue to examine Volkswagen’s attempts to mislead consumers and deceive the government. And we will continue to pursue the individuals responsible for orchestrating this damaging conspiracy,” said Attorney General Loretta E. Lynch in a statement. In addition, six Volkswagen executives and employees have been charged with their involvement in the scandal. They include, Richard Dorenkamp - In charge of Volkswagen’s Engine Development After-Treatment Department from 2003 to 2013. This department is where the cheat was developed. Bernd Gottweis - Volkswagen's supervisor responsible for Quality Management and Product Safety between 2007 to October 2014. Jens Hadler - Head of powertrain development from 2007 to 2011. Heinz-Jakob Neusser - Head of powertrain development from 2011 to 2013, suspended by Volkswagen back in 2015. Jürgen Peter - Worked in Volkswagen's Quality Management and Product Safety Group from 1990 to now. For a few months in 2015, he was a liaison for various regulatory agencies. Oliver Schmidt - Volkswagen's liaison with U.S. environmental regulators. He was arrested on Sunday in Miami as he was returning to Germany. Source: Department of Justice, Bloomberg, Reuters Press Release is on Page 2 Volkswagen AG Agrees to Plead Guilty and Pay $4.3 Billion in Criminal and Civil Penalties; Six Volkswagen Executives and Employees are Indicted in Connection with Conspiracy to Cheat U.S. Emissions Tests VW to Pay $2.8 Billion Criminal Fine in Guilty Plea and $1.5 Billion Settlement of Civil Environmental, Customs and Financial Violations; Monitor to Be Appointed to Oversee the Parent Company Volkswagen AG (VW) has agreed to plead guilty to three criminal felony counts and pay a $2.8 billion criminal penalty as a result of the company’s long-running scheme to sell approximately 590,000 diesel vehicles in the U.S. by using a defeat device to cheat on emissions tests mandated by the Environmental Protection Agency (EPA) and the California Air Resources Board (CARB), and lying and obstructing justice to further the scheme, the Justice Department announced today. In separate civil resolutions of environmental, customs and financial claims, VW has agreed to pay $1.5 billion. This includes EPA’s claim for civil penalties against VW in connection with VW’s importation and sale of these cars, as well as U.S. Customs and Border Protection (CBP) claims for customs fraud. In addition, the EPA agreement requires injunctive relief to prevent future violations. The agreements also resolve alleged violations of the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA). The Criminal Case: VW is charged with and has agreed to plead guilty to participating in a conspiracy to defraud the United States and VW’s U.S. customers and to violate the Clean Air Act by lying and misleading the EPA and U.S. customers about whether certain VW, Audi and Porsche branded diesel vehicles complied with U.S. emissions standards, using cheating software to circumvent the U.S. testing process and concealing material facts about its cheating from U.S. regulators. VW is also charged with obstruction of justice for destroying documents related to the scheme, and with a separate crime of importing these cars into the U.S. by means of false statements about the vehicles’ compliance with emissions limits. Under the terms of the plea agreement, which must be accepted by the court, VW will plead guilty to all these crimes, will be on probation for three years, will be under an independent corporate compliance monitor who will oversee the company for at least three years, and agrees to fully cooperate in the Justice Department’s ongoing investigation and prosecution of individuals responsible for these crimes. In addition, a federal grand jury in the Eastern District of Michigan returned an indictment today charging six VW executives and employees for their roles in the nearly 10-year conspiracy. Heinz-Jakob Neusser, 56; Jens Hadler, 50; Richard Dorenkamp, 68; Bernd Gottweis, 69; Oliver Schmidt, 48; and Jürgen Peter, 59, all of Germany, are charged with one count of conspiracy to defraud the United States, defraud VW’s U.S. customers and violate the Clean Air Act by making false representations to regulators and the public about the ability of VW’s supposedly “clean diesel” vehicles to comply with U.S. emissions requirements. The indictment also charges Dorenkamp, Neusser, Schmidt and Peter with Clean Air Act violations and charges Neusser, Gottweis, Schmidt and Peter with wire fraud counts. This case has been assigned to U.S. District Judge Sean F. Cox of the Eastern District of Michigan. Schmidt was arrested on Jan. 7, 2017, in Miami during a visit to the United States and appeared in federal court there on Monday. The other defendants are believed to presently reside in Germany. Today’s announcement was made by Attorney General Loretta E. Lynch, EPA Administrator Gina McCarthy and Assistant Administrator Cynthia Giles, Deputy Attorney General Sally Q. Yates, FBI Deputy Director Andrew McCabe, Acting Deputy Secretary Russell C. Deyo for the Department of Homeland Security, U.S. Attorney Barbara L. McQuade of the Eastern District of Michigan, Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Assistant Attorney General John C. Cruden of the Justice Department’s Environment and Natural Resources Division and Principal Deputy Assistant Attorney General Benjamin C. Mizer of the Justice Department’s Civil Division. “Volkswagen’s attempts to dodge emissions standards and import falsely certified vehicles into the country represent an egregious violation of our nation’s environmental, consumer protection and financial laws,” said Attorney General Lynch. “Today’s actions reflect the Justice Department’s steadfast commitment to defending consumers, protecting our environment and our financial system and holding individuals and companies accountable for corporate wrongdoing. In the days ahead, we will continue to examine Volkswagen’s attempts to mislead consumers and deceive the government. And we will continue to pursue the individuals responsible for orchestrating this damaging conspiracy.” “When Volkswagen broke the law, EPA stepped in to hold them accountable and address the pollution they caused,” said EPA Administrator McCarthy. “EPA’s fundamental and indispensable role becomes all too clear when companies evade laws that protect our health. The American public depends on a strong and active EPA to deliver clean air protections, and that is exactly what we have done.” “This wasn’t simply the action of some faceless, multinational corporation,” said Deputy Attorney General Yates. “This conspiracy involved flesh-and-blood individuals who used their positions within Volkswagen to deceive both regulators and consumers. From the start of this investigation, we’ve been committed to ensuring that those responsible for criminal activity are held accountable. We’ve followed the evidence—from the showroom to the boardroom—and it brought us to the people whose indictments we’re announcing today.” “Americans expect corporations to operate honestly and provide accurate information,” said Deputy Director McCabe. “Volkswagen’s data deception defrauded the U.S. government, violated the Clean Air Act and eroded consumer trust. This case sends a clear message to corporations, no matter how big or small, that if you lie and disregard rules that protect consumers and the environment, you will be caught and held accountable.” “Blatant violations of U.S. customs and environmental laws will not be tolerated, and this case reinforces that,” said Acting Deputy Secretary Deyo. “These actions put our economy, consumers and citizens at risk, and the Department of Homeland Security and U.S. Customs and Border Protection will continue to take every step necessary to protect the American people.” According to the indictment, the individuals occupied the following positions within the company: Heinz-Jakob Neusser: from July 2013 until September 2015, Neusser worked for VW as head of Development for VW Brand and was also on the management board for VW Brand. From October 2011 until July 2013, Neusser served as the head of Engine Development for VW. Jens Hadler: from May 2007 until March 2011, Hadler worked for VW as head of Engine Development for VW. Richard Dorenkamp: from 2003 until December 2013, Dorenkamp worked for VW as the head of VW’s Engine Development After-Treatment Department in Wolfsburg, Germany. From 2006 until 2013, Dorenkamp led a team of engineers that developed the first diesel engine that was designed to meet the new, tougher emissions standards in the United States. Bernd Gottweis: from 2007 until October 2014, Gottweis worked for VW as a supervisor with responsibility for Quality Management and Product Safety. Oliver Schmidt: from 2012 through February 2015, Schmidt was the General Manager in charge of the Environment and Engineering Office, located in Auburn Hills, Michigan. From February 2015 through September 2015, Schmidt returned to VW headquarters to work directly for Neusser, including on emissions issues. Jürgen Peter: Peter worked in the VW Quality Management and Product Safety Group from 1990 until the present. From March 2015 until July 2015, Peter was one of the VW liaisons between the regulatory agencies and VW. According to the charging documents and statement of facts filed with the court, in 2006, VW engineers began to design a new diesel engine to meet stricter U.S. emissions standards that would take effect by model year 2007. This new engine would be the cornerstone of a new project to sell diesel vehicles in the United States that would be marketed to buyers as “clean diesel,” a project that was an important strategic goal for VW’s management. When the co-conspirators realized that they could not design a diesel engine that would both meet the stricter NOx emissions standards and attract sufficient customer demand in the U.S. market, they decided they would use a software function to cheat standard U.S. emissions tests. VW engineers working under Dorenkamp and Hadler designed and implemented a software to recognize whether a vehicle was undergoing standard U.S. emissions testing on a dynamometer or it was being driven on the road under normal driving conditions. The software accomplished this by recognizing the standard published drive cycles. Based on these inputs, if the vehicle’s software detected that it was being tested, the vehicle performed in one mode, which satisfied U.S. NOx emissions standards. If the software detected that the vehicle was not being tested, it operated in a different mode, in which the vehicle’s emissions control systems were reduced substantially, causing the vehicle to emit NOx up to 40 times higher than U.S. standards. Disagreements over the direction of the project were articulated at a meeting over which Hadler presided, and which Dorenkamp attended. Hadler authorized Dorenkamp to proceed with the project knowing that only the use of the defeat device software would enable VW diesel vehicles to pass U.S. emissions tests. Starting with the first model year 2009 of VW’s new “clean diesel” engine through model year 2016, Dorenkamp, Neusser, Hadler and their co-conspirators installed, or caused to be installed, the defeat device software into the vehicles imported and sold in the United States. In order to sell their “clean diesel” vehicles in the United States, the co-conspirators lied to the EPA about the existence of their test-cheating software, hiding it from the EPA, CARB, VW customers and the U.S. public. Dorenkamp, Neusser, Hadler, Gottweis, Schmidt, Peter and their co-conspirators then marketed, and caused to be marketed, VW diesel vehicles to the U.S. public as “clean diesel” and environmentally-friendly. Around 2012, hardware failures developed in certain of the diesel vehicles. VW engineers believed the increased stress on the exhaust system from being driven in the “dyno mode” could be the cause of the hardware failures. In July 2012, VW engineers met with Neusser and Gottweis to explain what they believed to be the cause of the hardware failures and explained the defeat device. Gottweis and Neusser each encouraged further concealment of the software. In 2014, the co-conspirators perfected their cheating software by starting the vehicle in “street mode,” and, when the defeat device realized the vehicle was being tested, switching to the “dyno mode.” To increase the ability of the vehicle’s software to recognize that it was being tested on the dynamometer, the VW engineers activated a “steering wheel angle recognition feature.” With these alterations, it was believed the stress on the exhaust system would be reduced because the engine would not be operating for as long in “dyno mode.” The new function was installed in existing vehicles through software updates. The defendants and other co-conspirators falsely represented, and caused to be represented, to U.S. regulators, U.S. customers and others that the software update was intended to improve durability and emissions issues in the vehicles when, in fact, they knew it was used to more quickly deactivate emission control systems when the vehicle was not undergoing emissions tests. After years of VW selling their “clean diesel” vehicles in the United States that had the cheating software, in March 2014, West Virginia University’s Center for Alternative Fuels, Engines and Emissions published the results of a study commissioned by the International Council on Clean Transportation (ICCT). The ICCT study identified substantial discrepancies in the NOx emissions from certain VW vehicles when tested on the road compared to when these vehicles were undergoing EPA and CARB standard drive cycle tests on a dynamometer. Rather than tell the truth, VW employees, including Neusser, Gottweis, Schmidt and Peter, pursued a strategy to disclose as little as possible – to continue to hide the existence of the software from U.S. regulators, U.S. customers and the U.S. public. Following the ICCT study, CARB, in coordination with the EPA, attempted to work with VW to determine the cause for the higher NOx emissions in VW diesel vehicles when being driven on the road as opposed to on the dynamometer undergoing standard emissions test cycles. To do this, CARB, in coordination with the EPA, repeatedly asked VW questions that became increasingly more specific and detailed, and tested the vehicles themselves. In implementing their strategy of disclosing as little as possible, Neusser, Gottweis, Schmidt, Peter and their co-conspirators provided EPA and CARB with testing results, data, presentations and statements in an attempt to make it appear that there were innocent mechanical and technological problems to blame, while secretly knowing that the primary reason for the discrepancy was their cheating software that was installed in every VW diesel vehicle sold in the United States. The co-conspirators continued this back-and-forth with the EPA and CARB for over 18 months, obstructing the regulators’ attempts to uncover the truth. The charges in the indictment are merely accusations and each defendant is presumed innocent unless and until proven guilty. The case was investigated by the FBI and EPA-CID. The prosecution and corporate investigation are being handled by Securities and Financial Fraud Unit Chief Benjamin D. Singer and Trial Attorneys David Fuhr, Alison Anderson, Christopher Fenton and Gary Winters of the Criminal Division’s Fraud Section; Trial Attorney Jennifer Blackwell of the Environment and Natural Resources Division’s Environmental Crimes Section; and from the U.S. Attorney’s Office for the Eastern District of Michigan, Criminal Division Chief Mark Chutkow and White Collar Crime Unit Chief John K. Neal and Assistant U.S. Attorney Timothy J. Wyse. The Justice Department’s Office of International Affairs also assisted in the case. The Justice Department also extends its thanks to the Office of the Public Prosecutor in Braunschweig, Germany. The Civil Resolutions: The first civil settlement resolves EPA’s remaining claims against six VW-related entities (including Volkswagen AG, Audi AG and Porsche AG) currently pending in the multidistrict litigation before U.S. District Judge Charles R. Breyer of the Northern District of California. EPA’s complaint alleges that VW violated the Clean Air Act by selling approximately 590,000 cars that the United States alleges are equipped with defeat devices and, during normal operation and use, emit pollution significantly in excess of EPA-compliant levels. VW has agreed to pay $1.45 billion to resolve EPA’s civil penalty claims, as well as the civil penalty claim of CBP described below. The consent decree resolving the Clean Air Act claims also resolves EPA’s remaining claim in the complaint for injunctive relief to prevent future violations by requiring VW to undertake a number of corporate governance reforms and perform in-use testing of its vehicles using a portable emissions measurement system of the same type used to catch VW’s cheating in the first place. Today’s settlement is in addition the historic $14.7 billion settlement that addressed the 2.0 liter cars on the road and associated environmental harm announced in June 2016, and $1 billion settlement that addressed the 3.0 liter cars on the road and associated environmental harm announced in December 2016, which together included nearly $3 billion for environmental mitigation projects. A second civil settlement resolves civil fraud claims asserted by U.S. Customs and Border Protection (CBP) against VW entities. VW entities violated criminal and civil customs laws by knowingly submitting to CBP material false statements and omitting material information, over multiple years, with the intent of deceiving or misleading CBP concerning the admissibility of vehicles into the United States. CBP enforces U.S. customs laws as well as numerous laws on behalf of other governmental agencies related to health, safety, and border security. At the time of importation, VW falsely represented to CBP that each of the nearly 590,000 imported vehicles complied with all applicable environmental laws, knowing those representations to be untrue. CBP’s relationship with the importing community is one based on trust, and this resolution demonstrates that CBP will not tolerate abrogation of importer responsibilities and schemes to defraud the revenue of the United States. The $1.45 billion paid under the EPA settlement also resolves CBP’s claims. In a third settlement, VW has agreed to pay $50 million in civil penalties for alleged violations of FIRREA. The Justice Department alleged that a VW entity supported the sales and leasing of certain VW vehicles, including the defeat-device vehicles, by offering competitive financing terms by purchasing from dealers certain automobile retail installment contracts (i.e. loans) and leases entered into by customers that purchased or leased certain VW vehicles, as well as dealer floorplan loans. These financing arrangements were primarily collateralized by the vehicles underlying the loan and lease transactions. The department alleged that certain of these loans, leases and floorplan financings were pooled together to create asset-backed securities and that federally insured financial institutions purchased certain notes in these securities. Today’s FIRREA resolution is part of the department’s ongoing efforts to deter wrongdoers from using the financial markets to facilitate their fraud and to ensure the stability of the nation’s financial system. Except where based on admissions by VW, the claims resolved by the civil agreements are allegations only. The civil settlements were handled by the Environmental and Natural Resources Division’s Environmental Enforcement Section, with assistance from the EPA; the Civil Division’s Commercial Litigation Branch; and CBP. View full article
  7. Volkswagen will be cutting another big check. Today, the company announced that it had reached a settlement with Department of Justice over the criminal case on the diesel emission scandal. Volkswagen will plead guilty to three criminal felony charges and will pay $4.3 billion - $2.8 billion for the fine and $1.5 billion to settle civil cases. The settlement also requires an independent monitor to watch over the company for the next years. Volkswagen's board still needs to approve this settlement, but the company says the approval could happen today or tomorrow. If they waited, the parties would have to do it all over again with new people coming as part of President-elect Trump's team. “Today’s actions reflect the Justice Department’s steadfast commitment to defending consumers, protecting our environment and our financial system and holding individuals and companies accountable for corporate wrongdoing. In the days ahead, we will continue to examine Volkswagen’s attempts to mislead consumers and deceive the government. And we will continue to pursue the individuals responsible for orchestrating this damaging conspiracy,” said Attorney General Loretta E. Lynch in a statement. In addition, six Volkswagen executives and employees have been charged with their involvement in the scandal. They include, Richard Dorenkamp - In charge of Volkswagen’s Engine Development After-Treatment Department from 2003 to 2013. This department is where the cheat was developed. Bernd Gottweis - Volkswagen's supervisor responsible for Quality Management and Product Safety between 2007 to October 2014. Jens Hadler - Head of powertrain development from 2007 to 2011. Heinz-Jakob Neusser - Head of powertrain development from 2011 to 2013, suspended by Volkswagen back in 2015. Jürgen Peter - Worked in Volkswagen's Quality Management and Product Safety Group from 1990 to now. For a few months in 2015, he was a liaison for various regulatory agencies. Oliver Schmidt - Volkswagen's liaison with U.S. environmental regulators. He was arrested on Sunday in Miami as he was returning to Germany. Source: Department of Justice, Bloomberg, Reuters Press Release is on Page 2 Volkswagen AG Agrees to Plead Guilty and Pay $4.3 Billion in Criminal and Civil Penalties; Six Volkswagen Executives and Employees are Indicted in Connection with Conspiracy to Cheat U.S. Emissions Tests VW to Pay $2.8 Billion Criminal Fine in Guilty Plea and $1.5 Billion Settlement of Civil Environmental, Customs and Financial Violations; Monitor to Be Appointed to Oversee the Parent Company Volkswagen AG (VW) has agreed to plead guilty to three criminal felony counts and pay a $2.8 billion criminal penalty as a result of the company’s long-running scheme to sell approximately 590,000 diesel vehicles in the U.S. by using a defeat device to cheat on emissions tests mandated by the Environmental Protection Agency (EPA) and the California Air Resources Board (CARB), and lying and obstructing justice to further the scheme, the Justice Department announced today. In separate civil resolutions of environmental, customs and financial claims, VW has agreed to pay $1.5 billion. This includes EPA’s claim for civil penalties against VW in connection with VW’s importation and sale of these cars, as well as U.S. Customs and Border Protection (CBP) claims for customs fraud. In addition, the EPA agreement requires injunctive relief to prevent future violations. The agreements also resolve alleged violations of the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA). The Criminal Case: VW is charged with and has agreed to plead guilty to participating in a conspiracy to defraud the United States and VW’s U.S. customers and to violate the Clean Air Act by lying and misleading the EPA and U.S. customers about whether certain VW, Audi and Porsche branded diesel vehicles complied with U.S. emissions standards, using cheating software to circumvent the U.S. testing process and concealing material facts about its cheating from U.S. regulators. VW is also charged with obstruction of justice for destroying documents related to the scheme, and with a separate crime of importing these cars into the U.S. by means of false statements about the vehicles’ compliance with emissions limits. Under the terms of the plea agreement, which must be accepted by the court, VW will plead guilty to all these crimes, will be on probation for three years, will be under an independent corporate compliance monitor who will oversee the company for at least three years, and agrees to fully cooperate in the Justice Department’s ongoing investigation and prosecution of individuals responsible for these crimes. In addition, a federal grand jury in the Eastern District of Michigan returned an indictment today charging six VW executives and employees for their roles in the nearly 10-year conspiracy. Heinz-Jakob Neusser, 56; Jens Hadler, 50; Richard Dorenkamp, 68; Bernd Gottweis, 69; Oliver Schmidt, 48; and Jürgen Peter, 59, all of Germany, are charged with one count of conspiracy to defraud the United States, defraud VW’s U.S. customers and violate the Clean Air Act by making false representations to regulators and the public about the ability of VW’s supposedly “clean diesel” vehicles to comply with U.S. emissions requirements. The indictment also charges Dorenkamp, Neusser, Schmidt and Peter with Clean Air Act violations and charges Neusser, Gottweis, Schmidt and Peter with wire fraud counts. This case has been assigned to U.S. District Judge Sean F. Cox of the Eastern District of Michigan. Schmidt was arrested on Jan. 7, 2017, in Miami during a visit to the United States and appeared in federal court there on Monday. The other defendants are believed to presently reside in Germany. Today’s announcement was made by Attorney General Loretta E. Lynch, EPA Administrator Gina McCarthy and Assistant Administrator Cynthia Giles, Deputy Attorney General Sally Q. Yates, FBI Deputy Director Andrew McCabe, Acting Deputy Secretary Russell C. Deyo for the Department of Homeland Security, U.S. Attorney Barbara L. McQuade of the Eastern District of Michigan, Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Assistant Attorney General John C. Cruden of the Justice Department’s Environment and Natural Resources Division and Principal Deputy Assistant Attorney General Benjamin C. Mizer of the Justice Department’s Civil Division. “Volkswagen’s attempts to dodge emissions standards and import falsely certified vehicles into the country represent an egregious violation of our nation’s environmental, consumer protection and financial laws,” said Attorney General Lynch. “Today’s actions reflect the Justice Department’s steadfast commitment to defending consumers, protecting our environment and our financial system and holding individuals and companies accountable for corporate wrongdoing. In the days ahead, we will continue to examine Volkswagen’s attempts to mislead consumers and deceive the government. And we will continue to pursue the individuals responsible for orchestrating this damaging conspiracy.” “When Volkswagen broke the law, EPA stepped in to hold them accountable and address the pollution they caused,” said EPA Administrator McCarthy. “EPA’s fundamental and indispensable role becomes all too clear when companies evade laws that protect our health. The American public depends on a strong and active EPA to deliver clean air protections, and that is exactly what we have done.” “This wasn’t simply the action of some faceless, multinational corporation,” said Deputy Attorney General Yates. “This conspiracy involved flesh-and-blood individuals who used their positions within Volkswagen to deceive both regulators and consumers. From the start of this investigation, we’ve been committed to ensuring that those responsible for criminal activity are held accountable. We’ve followed the evidence—from the showroom to the boardroom—and it brought us to the people whose indictments we’re announcing today.” “Americans expect corporations to operate honestly and provide accurate information,” said Deputy Director McCabe. “Volkswagen’s data deception defrauded the U.S. government, violated the Clean Air Act and eroded consumer trust. This case sends a clear message to corporations, no matter how big or small, that if you lie and disregard rules that protect consumers and the environment, you will be caught and held accountable.” “Blatant violations of U.S. customs and environmental laws will not be tolerated, and this case reinforces that,” said Acting Deputy Secretary Deyo. “These actions put our economy, consumers and citizens at risk, and the Department of Homeland Security and U.S. Customs and Border Protection will continue to take every step necessary to protect the American people.” According to the indictment, the individuals occupied the following positions within the company: Heinz-Jakob Neusser: from July 2013 until September 2015, Neusser worked for VW as head of Development for VW Brand and was also on the management board for VW Brand. From October 2011 until July 2013, Neusser served as the head of Engine Development for VW. Jens Hadler: from May 2007 until March 2011, Hadler worked for VW as head of Engine Development for VW. Richard Dorenkamp: from 2003 until December 2013, Dorenkamp worked for VW as the head of VW’s Engine Development After-Treatment Department in Wolfsburg, Germany. From 2006 until 2013, Dorenkamp led a team of engineers that developed the first diesel engine that was designed to meet the new, tougher emissions standards in the United States. Bernd Gottweis: from 2007 until October 2014, Gottweis worked for VW as a supervisor with responsibility for Quality Management and Product Safety. Oliver Schmidt: from 2012 through February 2015, Schmidt was the General Manager in charge of the Environment and Engineering Office, located in Auburn Hills, Michigan. From February 2015 through September 2015, Schmidt returned to VW headquarters to work directly for Neusser, including on emissions issues. Jürgen Peter: Peter worked in the VW Quality Management and Product Safety Group from 1990 until the present. From March 2015 until July 2015, Peter was one of the VW liaisons between the regulatory agencies and VW. According to the charging documents and statement of facts filed with the court, in 2006, VW engineers began to design a new diesel engine to meet stricter U.S. emissions standards that would take effect by model year 2007. This new engine would be the cornerstone of a new project to sell diesel vehicles in the United States that would be marketed to buyers as “clean diesel,” a project that was an important strategic goal for VW’s management. When the co-conspirators realized that they could not design a diesel engine that would both meet the stricter NOx emissions standards and attract sufficient customer demand in the U.S. market, they decided they would use a software function to cheat standard U.S. emissions tests. VW engineers working under Dorenkamp and Hadler designed and implemented a software to recognize whether a vehicle was undergoing standard U.S. emissions testing on a dynamometer or it was being driven on the road under normal driving conditions. The software accomplished this by recognizing the standard published drive cycles. Based on these inputs, if the vehicle’s software detected that it was being tested, the vehicle performed in one mode, which satisfied U.S. NOx emissions standards. If the software detected that the vehicle was not being tested, it operated in a different mode, in which the vehicle’s emissions control systems were reduced substantially, causing the vehicle to emit NOx up to 40 times higher than U.S. standards. Disagreements over the direction of the project were articulated at a meeting over which Hadler presided, and which Dorenkamp attended. Hadler authorized Dorenkamp to proceed with the project knowing that only the use of the defeat device software would enable VW diesel vehicles to pass U.S. emissions tests. Starting with the first model year 2009 of VW’s new “clean diesel” engine through model year 2016, Dorenkamp, Neusser, Hadler and their co-conspirators installed, or caused to be installed, the defeat device software into the vehicles imported and sold in the United States. In order to sell their “clean diesel” vehicles in the United States, the co-conspirators lied to the EPA about the existence of their test-cheating software, hiding it from the EPA, CARB, VW customers and the U.S. public. Dorenkamp, Neusser, Hadler, Gottweis, Schmidt, Peter and their co-conspirators then marketed, and caused to be marketed, VW diesel vehicles to the U.S. public as “clean diesel” and environmentally-friendly. Around 2012, hardware failures developed in certain of the diesel vehicles. VW engineers believed the increased stress on the exhaust system from being driven in the “dyno mode” could be the cause of the hardware failures. In July 2012, VW engineers met with Neusser and Gottweis to explain what they believed to be the cause of the hardware failures and explained the defeat device. Gottweis and Neusser each encouraged further concealment of the software. In 2014, the co-conspirators perfected their cheating software by starting the vehicle in “street mode,” and, when the defeat device realized the vehicle was being tested, switching to the “dyno mode.” To increase the ability of the vehicle’s software to recognize that it was being tested on the dynamometer, the VW engineers activated a “steering wheel angle recognition feature.” With these alterations, it was believed the stress on the exhaust system would be reduced because the engine would not be operating for as long in “dyno mode.” The new function was installed in existing vehicles through software updates. The defendants and other co-conspirators falsely represented, and caused to be represented, to U.S. regulators, U.S. customers and others that the software update was intended to improve durability and emissions issues in the vehicles when, in fact, they knew it was used to more quickly deactivate emission control systems when the vehicle was not undergoing emissions tests. After years of VW selling their “clean diesel” vehicles in the United States that had the cheating software, in March 2014, West Virginia University’s Center for Alternative Fuels, Engines and Emissions published the results of a study commissioned by the International Council on Clean Transportation (ICCT). The ICCT study identified substantial discrepancies in the NOx emissions from certain VW vehicles when tested on the road compared to when these vehicles were undergoing EPA and CARB standard drive cycle tests on a dynamometer. Rather than tell the truth, VW employees, including Neusser, Gottweis, Schmidt and Peter, pursued a strategy to disclose as little as possible – to continue to hide the existence of the software from U.S. regulators, U.S. customers and the U.S. public. Following the ICCT study, CARB, in coordination with the EPA, attempted to work with VW to determine the cause for the higher NOx emissions in VW diesel vehicles when being driven on the road as opposed to on the dynamometer undergoing standard emissions test cycles. To do this, CARB, in coordination with the EPA, repeatedly asked VW questions that became increasingly more specific and detailed, and tested the vehicles themselves. In implementing their strategy of disclosing as little as possible, Neusser, Gottweis, Schmidt, Peter and their co-conspirators provided EPA and CARB with testing results, data, presentations and statements in an attempt to make it appear that there were innocent mechanical and technological problems to blame, while secretly knowing that the primary reason for the discrepancy was their cheating software that was installed in every VW diesel vehicle sold in the United States. The co-conspirators continued this back-and-forth with the EPA and CARB for over 18 months, obstructing the regulators’ attempts to uncover the truth. The charges in the indictment are merely accusations and each defendant is presumed innocent unless and until proven guilty. The case was investigated by the FBI and EPA-CID. The prosecution and corporate investigation are being handled by Securities and Financial Fraud Unit Chief Benjamin D. Singer and Trial Attorneys David Fuhr, Alison Anderson, Christopher Fenton and Gary Winters of the Criminal Division’s Fraud Section; Trial Attorney Jennifer Blackwell of the Environment and Natural Resources Division’s Environmental Crimes Section; and from the U.S. Attorney’s Office for the Eastern District of Michigan, Criminal Division Chief Mark Chutkow and White Collar Crime Unit Chief John K. Neal and Assistant U.S. Attorney Timothy J. Wyse. The Justice Department’s Office of International Affairs also assisted in the case. The Justice Department also extends its thanks to the Office of the Public Prosecutor in Braunschweig, Germany. The Civil Resolutions: The first civil settlement resolves EPA’s remaining claims against six VW-related entities (including Volkswagen AG, Audi AG and Porsche AG) currently pending in the multidistrict litigation before U.S. District Judge Charles R. Breyer of the Northern District of California. EPA’s complaint alleges that VW violated the Clean Air Act by selling approximately 590,000 cars that the United States alleges are equipped with defeat devices and, during normal operation and use, emit pollution significantly in excess of EPA-compliant levels. VW has agreed to pay $1.45 billion to resolve EPA’s civil penalty claims, as well as the civil penalty claim of CBP described below. The consent decree resolving the Clean Air Act claims also resolves EPA’s remaining claim in the complaint for injunctive relief to prevent future violations by requiring VW to undertake a number of corporate governance reforms and perform in-use testing of its vehicles using a portable emissions measurement system of the same type used to catch VW’s cheating in the first place. Today’s settlement is in addition the historic $14.7 billion settlement that addressed the 2.0 liter cars on the road and associated environmental harm announced in June 2016, and $1 billion settlement that addressed the 3.0 liter cars on the road and associated environmental harm announced in December 2016, which together included nearly $3 billion for environmental mitigation projects. A second civil settlement resolves civil fraud claims asserted by U.S. Customs and Border Protection (CBP) against VW entities. VW entities violated criminal and civil customs laws by knowingly submitting to CBP material false statements and omitting material information, over multiple years, with the intent of deceiving or misleading CBP concerning the admissibility of vehicles into the United States. CBP enforces U.S. customs laws as well as numerous laws on behalf of other governmental agencies related to health, safety, and border security. At the time of importation, VW falsely represented to CBP that each of the nearly 590,000 imported vehicles complied with all applicable environmental laws, knowing those representations to be untrue. CBP’s relationship with the importing community is one based on trust, and this resolution demonstrates that CBP will not tolerate abrogation of importer responsibilities and schemes to defraud the revenue of the United States. The $1.45 billion paid under the EPA settlement also resolves CBP’s claims. In a third settlement, VW has agreed to pay $50 million in civil penalties for alleged violations of FIRREA. The Justice Department alleged that a VW entity supported the sales and leasing of certain VW vehicles, including the defeat-device vehicles, by offering competitive financing terms by purchasing from dealers certain automobile retail installment contracts (i.e. loans) and leases entered into by customers that purchased or leased certain VW vehicles, as well as dealer floorplan loans. These financing arrangements were primarily collateralized by the vehicles underlying the loan and lease transactions. The department alleged that certain of these loans, leases and floorplan financings were pooled together to create asset-backed securities and that federally insured financial institutions purchased certain notes in these securities. Today’s FIRREA resolution is part of the department’s ongoing efforts to deter wrongdoers from using the financial markets to facilitate their fraud and to ensure the stability of the nation’s financial system. Except where based on admissions by VW, the claims resolved by the civil agreements are allegations only. The civil settlements were handled by the Environmental and Natural Resources Division’s Environmental Enforcement Section, with assistance from the EPA; the Civil Division’s Commercial Litigation Branch; and CBP.
  8. Some good news for Volkswagen as the Environmental Protection Agency has approved a fix for a select number of vehicles equipped with the 2.0L TDI. Reuters reports that the fix available for 70,000 vehicles will come in two phases. Right now, vehicles eligible for the fix will get a software update. The following year, Volkswagen will install more software, diesel particulate filter, diesel oxidation catalyst, and NOx catalyst. Now for the bad news, this fix is only available on the 2015 Audi A3, Volkswagen Beetle, Golf, Golf SportWagen, Jetta, and Passat. Volkswagen is still waiting on approval for fixes on the remaining 400,000 vehicles. "With today's approval, VW can offer vehicle owners the choice to keep and fix their car, or to have it bought back," the EPA said in a statement. The agency also noted the fix would "not affect vehicle fuel economy, reliability, or durability." We have to wonder how many owners will take Volkswagen up on the fix. The buyback option has proven to be very popular - getting the value of the vehicle before the scandal was brought to light. If there is one silver lining, Volkswagen will be able to sell the 2015 model year diesel vehicles once fixed. Source: Reuters
  9. Some good news for Volkswagen as the Environmental Protection Agency has approved a fix for a select number of vehicles equipped with the 2.0L TDI. Reuters reports that the fix available for 70,000 vehicles will come in two phases. Right now, vehicles eligible for the fix will get a software update. The following year, Volkswagen will install more software, diesel particulate filter, diesel oxidation catalyst, and NOx catalyst. Now for the bad news, this fix is only available on the 2015 Audi A3, Volkswagen Beetle, Golf, Golf SportWagen, Jetta, and Passat. Volkswagen is still waiting on approval for fixes on the remaining 400,000 vehicles. "With today's approval, VW can offer vehicle owners the choice to keep and fix their car, or to have it bought back," the EPA said in a statement. The agency also noted the fix would "not affect vehicle fuel economy, reliability, or durability." We have to wonder how many owners will take Volkswagen up on the fix. The buyback option has proven to be very popular - getting the value of the vehicle before the scandal was brought to light. If there is one silver lining, Volkswagen will be able to sell the 2015 model year diesel vehicles once fixed. Source: Reuters View full article
  10. Some good news for Volkswagen as the Environmental Protection Agency has approved a fix for a select number of vehicles equipped with the 2.0L TDI. Reuters reports that the fix available for 70,000 vehicles will come in two phases. Right now, vehicles eligible for the fix will get a software update. The following year, Volkswagen will install more software, diesel particulate filter, diesel oxidation catalyst, and NOx catalyst. Now for the bad news, this fix is only available on the 2015 Audi A3, Volkswagen Beetle, Golf, Golf SportWagen, Jetta, and Passat. Volkswagen is still waiting on approval for fixes on the remaining 400,000 vehicles. "With today's approval, VW can offer vehicle owners the choice to keep and fix their car, or to have it bought back," the EPA said in a statement. The agency also noted the fix would "not affect vehicle fuel economy, reliability, or durability." We have to wonder how many owners will take Volkswagen up on the fix. The buyback option has proven to be very popular - getting the value of the vehicle before the scandal was brought to light. If there is one silver lining, Volkswagen will be able to sell the 2015 model year diesel vehicles once fixed. Source: Reuters View full article
  11. There will always be those who try their best to find loopholes. Case in point are some Volkswagen TDI owners who deciding to strip their vehicles for parts before turning them into dealers. This came to light a couple of weeks ago on Jalopnik as it had found various threads on Reddit and TDI forums with such titles as “Will anyone be stripping salvaging parts before selling back?” and "Stripping the Turn-Ins". Why are there owners who are seriously considering this? It comes down to EPA's consent decree which states a vehicle must be 'operatable'. This is defined by the court as, "“Operable” means that a vehicle so described can be driven under its own 2.0-liter TDI engine power. A vehicle is not Operable if it had a branded title of “Assembled,” “Dismantled,” “Flood,” “Junk,” “Rebuilt,” “Reconstructed,” or “Salvaged” as of September 18, 2015, and was acquired by any person or entity from a junkyard or salvaged after September 18, 2015." This definition leaves a lot of room for interpretation and some are taking that to mean it is ok to remove a number of parts. In fact, one Volkswagen TDI owner in Ohio basically removed almost everything on his Golf to see if Volkswagen would buy it back and was brought to light by Jalopnik last week. But this loophole has been closed. USA Today reports that U.S. District Court Judge Charles Breyer warned owners last Thursday not to strip their vehicles. This was brought up by Volkswagen's attorney which referenced the Jalopnik story. "Clearly the purpose of the agreement by Volkswagen was to accept these cars in the condition that they were in as they were being driven on the road, and not to strip the cars," Breyer said at the hearing. Jonathan Cohen, an attorney for the Federal Trade Commission told USA Today that the agency is "absolutely against bad-faith behavior by consumers" but also noted that VW cannot reject buybacks based on "the vehicle's superficial condition." (i.e. normal wear and tear). Breyer said he would consider taking further action if needed at a later time. Source: Jalopnik, 2 , USA Today View full article
  12. There will always be those who try their best to find loopholes. Case in point are some Volkswagen TDI owners who deciding to strip their vehicles for parts before turning them into dealers. This came to light a couple of weeks ago on Jalopnik as it had found various threads on Reddit and TDI forums with such titles as “Will anyone be stripping salvaging parts before selling back?” and "Stripping the Turn-Ins". Why are there owners who are seriously considering this? It comes down to EPA's consent decree which states a vehicle must be 'operatable'. This is defined by the court as, "“Operable” means that a vehicle so described can be driven under its own 2.0-liter TDI engine power. A vehicle is not Operable if it had a branded title of “Assembled,” “Dismantled,” “Flood,” “Junk,” “Rebuilt,” “Reconstructed,” or “Salvaged” as of September 18, 2015, and was acquired by any person or entity from a junkyard or salvaged after September 18, 2015." This definition leaves a lot of room for interpretation and some are taking that to mean it is ok to remove a number of parts. In fact, one Volkswagen TDI owner in Ohio basically removed almost everything on his Golf to see if Volkswagen would buy it back and was brought to light by Jalopnik last week. But this loophole has been closed. USA Today reports that U.S. District Court Judge Charles Breyer warned owners last Thursday not to strip their vehicles. This was brought up by Volkswagen's attorney which referenced the Jalopnik story. "Clearly the purpose of the agreement by Volkswagen was to accept these cars in the condition that they were in as they were being driven on the road, and not to strip the cars," Breyer said at the hearing. Jonathan Cohen, an attorney for the Federal Trade Commission told USA Today that the agency is "absolutely against bad-faith behavior by consumers" but also noted that VW cannot reject buybacks based on "the vehicle's superficial condition." (i.e. normal wear and tear). Breyer said he would consider taking further action if needed at a later time. Source: Jalopnik, 2 , USA Today
  13. There is finally some good news for owners of the 80,000 vehicles equipped with Volkswagen's 3.0L TDI V6. Today in U.S. Federal Court in San Fransisco, District Court Judge Charles Breyer announced that Volkswagen and the U.S. Government have a reached an agreement on the 3.0L TDI settlement. The AFP in a tweet reports the settlement will total $1 billion. The agreement will see Volkswagen buying back 20.000 models as they cannot be retrofitted with new parts to make them legal. The remaining 60,000 models will be fixed once Volkswagen and U.S. Government agree on one. No matter which option, there will be compensation, although how much is unknown at this time. Breyer admitted during the hearing the two parties still have some issues to hammer out. Another hearing has been scheduled for Thursday for an update. Source: AFP, Reuters
  14. There is finally some good news for owners of the 80,000 vehicles equipped with Volkswagen's 3.0L TDI V6. Today in U.S. Federal Court in San Fransisco, District Court Judge Charles Breyer announced that Volkswagen and the U.S. Government have a reached an agreement on the 3.0L TDI settlement. The AFP in a tweet reports the settlement will total $1 billion. The agreement will see Volkswagen buying back 20.000 models as they cannot be retrofitted with new parts to make them legal. The remaining 60,000 models will be fixed once Volkswagen and U.S. Government agree on one. No matter which option, there will be compensation, although how much is unknown at this time. Breyer admitted during the hearing the two parties still have some issues to hammer out. Another hearing has been scheduled for Thursday for an update. Source: AFP, Reuters View full article
  15. There appears to be some movement on the 3.0L TDI settlement between Volkswagen and U.S. Government. A source briefed on the 3.0L TDI V6 settlement told Reuters that Volkswagen will pay $200 million into a pollution reduction fund. This is on top of the $2.7 billion Volkswagen will be paying for the 2.0L TDI pollution reduction fund. This seems to be the only thing the two groups have agreed on at the moment. Yesterday, a hearing at U.S. Federal Court in San Fransisco was pushed back few hours to give them more time to negotiate. U.S. District Judge Charles Breyer said at the hearing the parties have made "substantial progress and I am optimistic that there will be a resolution." Breyer has given them until Monday to see if an agreement can be reached. The sticking point in the negotiations over the 3.0L TDI has been how much Volkswagen would offer in compensation to owners who get their vehicles repaired or bought back. Reuters says Volkswagen, the U.S. Federal Trade Commission, and lawyers for the suing owners have been going at it for weeks. Source: Reuters
  16. There appears to be some movement on the 3.0L TDI settlement between Volkswagen and U.S. Government. A source briefed on the 3.0L TDI V6 settlement told Reuters that Volkswagen will pay $200 million into a pollution reduction fund. This is on top of the $2.7 billion Volkswagen will be paying for the 2.0L TDI pollution reduction fund. This seems to be the only thing the two groups have agreed on at the moment. Yesterday, a hearing at U.S. Federal Court in San Fransisco was pushed back few hours to give them more time to negotiate. U.S. District Judge Charles Breyer said at the hearing the parties have made "substantial progress and I am optimistic that there will be a resolution." Breyer has given them until Monday to see if an agreement can be reached. The sticking point in the negotiations over the 3.0L TDI has been how much Volkswagen would offer in compensation to owners who get their vehicles repaired or bought back. Reuters says Volkswagen, the U.S. Federal Trade Commission, and lawyers for the suing owners have been going at it for weeks. Source: Reuters View full article
  17. American criminal lawyers are in demand at Volkswagen. Bloomberg has learned from sources that various executives at the company are hiring lawyers as the Department of Justice begins sending out officials to Germany for meetings to gather evidence for possible criminal charges. Volkswagen has already agreed to a $16 billion settlement over the diesel emission scandal. But the Department of Justice is continuing their investigation into whether various Volkswagen executives knew about the cheating software installed on over 10 million diesel vehicles around the world. As we reported back in September, a Volkswagen engineer has pled guilty for being involved in the scandal. Volkswagen has long maintained that none of its executives knew about the software and that it was a rogue group of engineers that went forward with this decision. But as we have been reporting for the past year, various documents and emails that have been leaked out put serious doubts into this claim. It is unknown if this investigation involves former Volkswagen CEO Martin Winterkorn who stepped down shortly after the scandal broke. If the Department of Justice was to bring Volkswagen executives to court, they could be facing some roadblocks. Germany's constitution doesn’t allow citizens to be extradited outside the European Union. A source tells Bloomberg the Department of Justice is looking into possible ways to bring them to the U.S. Source: Bloomberg View full article
  18. American criminal lawyers are in demand at Volkswagen. Bloomberg has learned from sources that various executives at the company are hiring lawyers as the Department of Justice begins sending out officials to Germany for meetings to gather evidence for possible criminal charges. Volkswagen has already agreed to a $16 billion settlement over the diesel emission scandal. But the Department of Justice is continuing their investigation into whether various Volkswagen executives knew about the cheating software installed on over 10 million diesel vehicles around the world. As we reported back in September, a Volkswagen engineer has pled guilty for being involved in the scandal. Volkswagen has long maintained that none of its executives knew about the software and that it was a rogue group of engineers that went forward with this decision. But as we have been reporting for the past year, various documents and emails that have been leaked out put serious doubts into this claim. It is unknown if this investigation involves former Volkswagen CEO Martin Winterkorn who stepped down shortly after the scandal broke. If the Department of Justice was to bring Volkswagen executives to court, they could be facing some roadblocks. Germany's constitution doesn’t allow citizens to be extradited outside the European Union. A source tells Bloomberg the Department of Justice is looking into possible ways to bring them to the U.S. Source: Bloomberg
  19. The first person has been charged in the U.S.' Volkswagen diesel emission probe. Today at the U.S. Federal Court in Detroit, James Robert Liang, leader of diesel competence for Volkswagen from 2008 until June of this year entered a plea of guilty to conspiracy to defraud the U.S. government, commit wire fraud, and violate the Clean Air Act. According to grand jury indictment filed back in June and unsealed today, “Liang and his co-conspirators, including current and former employees, and others, agreed to defraud the U.S. and VW customers, and violate the Clean Air Act, by misleading the U.S. and VW customers about whether VW diesel motors complied with U.S. emissions standards,” prosecutors wrote. Documents showed Liang was on the team that developed the diesel engine at the center of this scandal, the EA 189 2.0L four-cylinder back in 2006. The team realized that the engine wouldn't meet the strict U.S. standards on nitrogen oxide emissions while also attracting “sufficient customer demand.” Thus the decision was made to develop and install the 'defeat device' software on the EA 189 to pass emission tests. This engine would be installed on various Volkswagen vehicles starting in 2009. In 2014, Liang's team would update the software to help cut down on warranty claims. Engineers believed the reason for the increase in claims was due to the vehicle operating with the defeat device on for too long. Around this time, U.S. regulators would begin asking Volkswagen questions about the discrepancies between the amount of emissions being emitted during lab tests and in real-world driving. Various Volkswagen employees either lied when talking with regulators. “I know VW did not disclose the defeat device to U.S. regulators in order to sell the cars in the U.S. That’s what makes me guilty,” said Liang to the court. Liang faces up to five years in jail and a fine of up to $250,000 or twice the gross gain or loss. In a plea agreement signed on August 31st, prosecutors say in exchange for his agreement to cooperate with the probe, the U.S. government agrees not to use any new information about Liang’s own criminal conduct during the sentencing hearing expected to take place on January 11th. Liang's cooperation could help out in the investigation and shine a light on more people involved. When asked for comment, Volkswagen spokeswoman Jeannine Ginivan declined. Source: Automotive News (Subscription Required), Bloomberg, The Detroit News
  20. Volkswagen and U.S. Government were going to have a hearing at U.S. Federal Court in San Francisco today for an update on the 3.0L TDI talks. But yesterday, U.S. District Judge Charles Breyer has pushed it back to next month. Reuters got their hands on a court order in which Breyer says "negotiations are continuing between the German automaker, regulators, and lawyers representing owners," and a delay "may produce a resolution of the outstanding issues." As we reported earlier this month, Volkswagen and regulators have possibly reached a deal for the 3.0L TDI with 60,000 of the affected vehicles being fixed, and the other 20,000 being bought back. There are still a number of issues that need to be worked out, hence the delay. Source: Reuters View full article
  21. Volkswagen and U.S. Government were going to have a hearing at U.S. Federal Court in San Francisco today for an update on the 3.0L TDI talks. But yesterday, U.S. District Judge Charles Breyer has pushed it back to next month. Reuters got their hands on a court order in which Breyer says "negotiations are continuing between the German automaker, regulators, and lawyers representing owners," and a delay "may produce a resolution of the outstanding issues." As we reported earlier this month, Volkswagen and regulators have possibly reached a deal for the 3.0L TDI with 60,000 of the affected vehicles being fixed, and the other 20,000 being bought back. There are still a number of issues that need to be worked out, hence the delay. Source: Reuters
  22. Porsche currently has between 1,300 to 1,500 new Cayenne diesels that are just sitting around on dealer lots because of the diesel emission scandal. But when a fix for the diesel engine is given the ok, you'll be able to get one with a hell of a discount. Speaking with Automotive News, Porsche Cars North America CEO Klaus Zellmer said that once the U.S. Federal Court gives the approval for the fix, they will fix the affected Cayennes for both owners and those on dealer lots. Once fixed, the ones sitting on dealer lots will not go onto the new car lot. Instead, you'll find them in the used car section. "Then they're going to be sold as used cars. They will be low-mileage, very attractive used cars, based on the age of the car. There's always a market for any car. You just have to get the price right," said Zellmer. It is unknown how much Porsche plans to discount the Cayenne Diesels that are sitting on dealer lots. We wouldn't be shocked if there is a price cut of $5,000 or more. Source: Automotive News (Subscription Required) View full article
  23. Porsche currently has between 1,300 to 1,500 new Cayenne diesels that are just sitting around on dealer lots because of the diesel emission scandal. But when a fix for the diesel engine is given the ok, you'll be able to get one with a hell of a discount. Speaking with Automotive News, Porsche Cars North America CEO Klaus Zellmer said that once the U.S. Federal Court gives the approval for the fix, they will fix the affected Cayennes for both owners and those on dealer lots. Once fixed, the ones sitting on dealer lots will not go onto the new car lot. Instead, you'll find them in the used car section. "Then they're going to be sold as used cars. They will be low-mileage, very attractive used cars, based on the age of the car. There's always a market for any car. You just have to get the price right," said Zellmer. It is unknown how much Porsche plans to discount the Cayenne Diesels that are sitting on dealer lots. We wouldn't be shocked if there is a price cut of $5,000 or more. Source: Automotive News (Subscription Required)
  24. Will Volkswagen make a return with diesels to the U.S. or not? Unfortunately, we're getting mixed messages on this issue. Back in July, Volkswagen of America CEO Hinrich Woebcken said diesel would not a core element of the brand going forward. But they could start selling a diesel vehicle in the U.S. again if it makes sense. “We are not stopping diesel. Wherever diesel makes sense as a package to the car, we’ll continue. But in reality, we have to accept that the high percentage of diesels that we had before will not come back again,” said Woebcken. Last week in an interview with Motor Trend, Woebcken reiterated his earlier statement with the automaker not ruling out diesels in the future. But this week, Volkswagen brand chief Herbert Diess told German business paper Handelsblatt that diesel will not be returning to Volkswagen's U.S. lineup. "At the moment we assume that we will offer no new diesel vehicles in the U.S," said Diess. “The reason is the legal framework.” Who to believe? We're not sure ourselves. Stay tuned. Source: Motor Trend, Handelsblatt, Reuters View full article
  25. Will Volkswagen make a return with diesels to the U.S. or not? Unfortunately, we're getting mixed messages on this issue. Back in July, Volkswagen of America CEO Hinrich Woebcken said diesel would not a core element of the brand going forward. But they could start selling a diesel vehicle in the U.S. again if it makes sense. “We are not stopping diesel. Wherever diesel makes sense as a package to the car, we’ll continue. But in reality, we have to accept that the high percentage of diesels that we had before will not come back again,” said Woebcken. Last week in an interview with Motor Trend, Woebcken reiterated his earlier statement with the automaker not ruling out diesels in the future. But this week, Volkswagen brand chief Herbert Diess told German business paper Handelsblatt that diesel will not be returning to Volkswagen's U.S. lineup. "At the moment we assume that we will offer no new diesel vehicles in the U.S," said Diess. “The reason is the legal framework.” Who to believe? We're not sure ourselves. Stay tuned. Source: Motor Trend, Handelsblatt, Reuters

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