The U.S. Department of Justice says Winterkorn has been charged with four counts of violating federal law. The first count is the most serious as it alleges “Winterkorn conspired with other senior VW executives and employees to defraud the United States.”
The first count also says the company defrauded U.S. customers and violated 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 remaining three counts charge Winterkorn committed wire fraud in connection with the scheme.
Winterkorn was informed Volkswagen was cheating in 2014
According to the government, Winterkorn was told about the emissions cheating in May 2014 and, again, in July 2015. The indictment alleges after Winterkorn was “clearly informed of the emissions cheating” he agreed with senior VW executives to continue to “perpetrate the fraud and deceive U.S. regulators.”
Interestingly, the government’s case seems to focus on the fallout of a study commissioned by the International Council on Clean Transportation in the spring of 2014. The study examined driving emissions from two diesel-powered Volkswagen vehicles and results showed both had significantly elevated levels of nitrogen oxide (NOx) emissions.
The government says Volkswagen quickly learned about the results of the study and Bernd Gottweis, a senior manager who was responsible for product safety issues, met with employees of the engine development department to discuss it. Shortly after the meeting, Gottweis wrote a one-page memorandum describing the results of the test and warned that Volkswagen couldn’t explain why NOx emissions were significantly higher during the test. The memo also stated it was likely that authorities would investigate whether or not the vehicles contained defeat devices. Gottweis’ memorandum and a cover note, authored by an unnamed senior VW executive, were then sent to Winterkorn.
The government says Volkswagen declined to come clean after memorandum was written on May 22th, 2014. Volkswagen continued to deny the existence of defeat devices until the summer of 2015. At the time, U.S. regulators threatened to withhold authorization for Volkswagen to sell 2016 model year vehicles in the United States until the company explained the discrepancies raised by the ICCT study.
Volkswagen executives were shown a PowerPoint presentation detailing the cheating
The threat to stop U.S. sales reportedly sent Volkswagen into panic mode and they held a “damage table meeting” on July 27th, 2015 in Wolfsburg, Germany. The meeting was reportedly attended by a number of senior Volkswagen executives including Winterkorn. They were allegedly shown a PowerPoint presentation which explained “(1) how VW was deceiving U.S. regulators, including precisely what information had been disclosed and what had not yet been disclosed; and (2) the potential consequences of VW being caught cheating.”
After this meeting, Winterkorn allegedly approved a course of action to send Oliver Schmidt to meet with a senior CARB official to get the approval to sell 2016 model year vehicles in the United States without revealing the defeat device. VW executives also approved a script, “consistent with Winterkorn’s alleged directive,” for a meeting with CARB to conceal their emissions cheating.
However, the whole charade fell apart at that CARB meeting as a Volkswagen employee in “direct contravention of the instructions from his superiors” revealed the company’s 2.0-liter TDI engines were using defeat devices. Less than one month later, on September 3rd 2015, Volkswagen admitted to using defeat devices.
VW will be prosecuted to the fullest extent of the law
In a statement, U.S. Attorney General Jeff Sessions said “If you try to deceive the United States, then you will pay a heavy price.” He went on to say “The indictment unsealed today alleges that Volkswagen’s scheme to cheat its legal requirements went all the way to the top of the company.” Sessions added the government will “prosecute this case to the fullest extent of the law.”
The Department of Justice says the investigation is ongoing as Volkswagen committed “unprecedented emissions cheating.” The government notes Volkswagen plead guilty to criminal charges in March of 2017 that it deceived U.S. regulatory agencies – including the Environmental Protection Agency and California Air Resources Board – by using defeat devices. As part of a plea agreement, the automaker was paid a $2.8 billion fine.