Volkswagen agrees to $4.3 billion settlement

Volkswagen has agreed to plead guilty in the emissions scandal and pay USD 4.3 billion in criminal and civil penalties. Six VW executives and employees have also been indicted for their role to cheat US emissions tests.

The nearly 10-year emissions conspiracy has finally come to an end after Volkswagen (VW) reached a costly settlement with the US department of justice.

VW agreed to plead guilty to three felony counts and pay a USD 2.8 billion criminal penalty as a result of its long-running scheme to sell around 590,000 diesel vehicles in the US by using a defeat device to cheat on mandated emissions tests.

The German automaker also agreed to pay USD 1.5 billion in civil penalties to resolve a variety of environmental, customs and financial claims, as well as a series of measures to further strengthen its compliance and control systems, including the appointment of an independent monitor for a period of three years.

The terms of the plea agreement still have to be accepted by the court.

“Volkswagen deeply regrets the behaviour that gave rise to the diesel crisis,” said VW CEO Matthias Müller in a statement announcing the settlement. “The agreements that we have reached with the U.S. government reflect our determination to address misconduct that went against all of the values Volkswagen holds so dear.”

In addition to the plea agreements, a federal grand jury in Michigan returned an indictment yesterday charging six VW executives and employees for their roles in the nearly 10-year conspiracy. All are from Germany and are charged with conspiracy to defraud the US, defraud VW’s US customers and violate the Clean Air Act.

“This wasn’t simply the action of some faceless, multinational corporation,” said US Deputy Attorney General Sally Yates in statement. “This conspiracy involved flesh-and-blood individuals who used their positions within Volkswagen to deceive both regulators and consumers.”

As the FBI explains, the investigation revealed that VW falsely advertised that its vehicles complied with federal anti-pollution measures when, according to Attorney General Loretta Lynch, “hundreds of thousands of cars that VW sold in the United States were pumping illegal levels of nitrogen oxides into the atmosphere—up to 40 times more than amounts permitted.”

Investigators discovered that the vehicles were equipped with cheating software that circumvented the U.S. testing process.

Said FBI Deputy Director Andrew McCabe: “Consumers expect that companies tell the truth about their products. If environmentally conscious buyers are told they are purchasing green cars, then they should be getting, in fact, green cars—not cars that spew out pollution.”

Image credit: Rob Brewer, flickr/Creative Commons

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