US charges ex-Volkswagen CEO Martin Winterkorn in emissions scandal
A federal grand jury has charged former Volkswagen CEO Martin Winterkorn with wire fraud in what prosecutors say was a long-running scheme to cheat diesel-emission standards for U.S. vehicles.
Winterkorn, 70, and other senior executives of the German carmaker conspired for about nine years to mislead investors and U.S. consumers about the ability of its "clean diesel" vehicles to comply with the country's rules, according to an indictment unsealed Thursday in U.S. District Court in Michigan. Winterkorn, who stepped down from the top job shortly after the federal investigation began, also faces three counts of wire fraud in a scandal that has weighed on the company's U.S. stock for more than two years.
“If you try to deceive the United States, then you will pay a heavy price,” Attorney General Jeff Sessions, an appointee of President Trump, said in a statement. “The indictment unsealed today alleges that Volkswagen’s scheme to cheat its legal requirements went all the way to the top of the company. These are serious allegations, and we will prosecute this case to the fullest extent of the law."
Environmental Protection Agency Administrator Scott Pruitt said the indictment sends “a clear message that EPA and its law enforcement partners will seek to hold corporate officers accountable for alleged criminal activities.”
According to the indictment, Winterkorn and other Volkswagen executives implemented software that made VW and Audi diesel vehicles appear to meet U.S. emissions standards when they didn't, thus boosting the company's sales and, potentially, their own incomes.
The so-called defeat device, which tightened engine emission controls enough to meet requirements when the software recognized a test was being performed, was developed after VW executives realized the carmaker was unable to build a diesel engine that was both compliant and had market appeal, prosecutors said.
Under normal driving conditions, which the software also recognized, the diesel engines' emission-control systems were much less effective, allowing them to pump as much as 35 times more nitrogen oxides into the environment than U.S. regulators allowed, according to the indictment. The pollutants contribute to both smog and acid rain.
The Justice Department and the EPA notified Volkswagen of the investigation in late September 2015, and the company promised to cooperate. Winterkorn relinquished his roles as CEO and chairman of the supervisory board five days later.
"I am doing this in the interests of the company, even though I am not aware of any wrong doing on my part," he said at the time. "Volkswagen needs a fresh start — also in terms of personnel. I am clearing the way for this fresh start with my resignation."
The company's U.S. shares have climbed 8.2 percent since the investigation was disclosed, trailing 32 percent growth on the broader S&P 500.
Volkswagen “continues to cooperate with investigations by the Department of Justice," said Pietro Zollino, a company spokesman. "It would not be appropriate to comment on individual cases.”
https:// www.washingtonexaminer.com/business/us-charges-ex-volkswagen-ceo-martin-winterkorn-in-emissions-scandal