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German car giant Volkswagen agreed Wednesday that it will plead guilty to criminal charges and pay a record US$4.3 billion in fines to the United States.
As well as the record US$4.3 billion in U.S. civil and criminal fines, Volkswagen will also pay the state of California US$153.8 million. The company has so far agreed to pay up to US$22 billion in settlements with U.S. states, individual owners, environmental regulators, car dealerships and environmental regulators.
Volkswagen will plead guilty to conspiracy to commit fraud, obstruction of justice and entry of goods by means of false statements. Six Volkswagen executives and employees were also charged for their involvement in a decade-long emission scandal where the company misled the public about its vehicles’ emission standards.
In what has been dubbed “Dieselgate,” the U.S. Environmental Protection Agency first discovered that Volkswagen diesel cars were equipped with software that modified emissions of certain air pollutants.
In 2015, Volkswagen admitted that the advanced secret software was installed in hundreds of thousands of diesel cars, allowing them to cheat on exhaust emissions tests. Volkswagen marketed its diesel car as an alternative to standard petrol, with better gas mileage.
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The Department of Justice said that in 2012 that company officials and lawyers ordered engineers and employees to destroy documents which detailed the emissions cheating. The company has been banned from selling its diesel car in the U.S. since 2015.
Oliver Schmidt, who was in charge the company’s environmental and engineering office in Michigan was arrested and will face trial Thursday to decide if he should remain in jail before going to trial. Former heads of development Heinz-Jakob Neusser, Jens Hadler and Richard Dorenkamp were also indicted.
As part of the guilty agreement, Volkswagen has fired six employees while also suspending and disciplining others involved in the scandal. Many senior managers departed following the scandal, including former Chief Executive Officer Martin Winterkorn.
The company is also facing similar legal action over the emissions cover up in the European Union and Australia.
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