FBI Arrests Volkswagen Exec Oliver Schmidt For Conspiracy To Defraud The United States

The US Federal Bureau of Investigation (FBI) has arrested the former head of Volkswagen’s regulatory compliance department in the US, Oliver Schmidt, on charges of conspiracy to defraud the United States.

Schmidt — who ran Volkswagen’s regulatory compliance office in the US from 2014 to March 2015 — was arrested on Saturday in Florida, and is reportedly being brought before the court today in Detroit. He faces up to 5 years in prison for the charge … or he could get by with nothing but a fine.

A court filing on Monday reveals that the Volkswagen management board was informed about the “existence, purpose, and characteristics” of the company’s diesel emission vehicles’ defeat devices (allowing for US regulatory tests to be gamed) all the way back in July 2015 — and that the company’s management board chose to continue to conceal this fact from US regulators rather than to reveal it.

Reuters provides more:

An FBI complaint unsealed on Monday against Schmidt said he and other VW employees told executive management about the “existence, purpose and characteristics” of an emissions cheating device in July 2015, and that the executives chose not to immediately disclose it to U.S. regulators.

The FBI complaint accused VW of deliberately misleading regulators about cheating pollution tests in the United States, but did not charge the company with a crime.

Schmidt and other employees gave a presentation about the “defeat device” on or about July 27, 2015, more than a month before the automaker disclosed the device to U.S. regulators in September 2015, the complaint said.

The cheating allowed nearly 580,0000 of VW’s U.S. diesel vehicles sold since 2009 to emit up to 40 times legally allowable pollution levels.

“In the presentation, VW employees assured VW executive management that U.S. regulators were not aware of the defeat device,” the complaint said. “Rather than advocate for disclosure of the defeat device to U.S. regulators, VW executive management authorized its continued concealment.”

One slide in the presentation included “Indictment?” if regulators did not approve its diesel software for 2016 models, according to the complaint.

Volkswagen said it could not comment on an ongoing legal matter. Hinrich Woebcken, VW’s chief executive of the North America region, told reporters at the Detroit auto show on Monday that the automaker was “surprised” by the criminal charge.

Schmidt apparently played a major role in all of this, and subsequently sought to convince US regulators that emissions testing discrepancies were the result of “technical problems” rather than intentional fraud.

The news follows the arrest (and guilty plea) of a Volkswagen engineer late last year in the US on related charges; and also the conviction of a local exec in South Korea earlier this month on charges of document fabrication, the violation of environmental law, and obstruction.

Notably, though, this is the first time that a Volkswagen exec has been charged with criminal behavior in the US in relation with the ongoing diesel emissions cheating scandal.

Photo by Broward County Sheriff’s Office