A Volkswagen dealership in Carlsbad, Calif. (Mike Blake/Reuters)
U.S. officials indicted six executives at German automaker Volkswagen on Wednesday in connection with company’s efforts to deliberately deceive U.S. regulators about the emissions standards of its diesel engine vehicles and sell those cars illegally to American drivers.
Five of the six executives are currently in Germany, and Attorney General Loretta Lynch said it was too soon to say how that will impact legal proceedings moving forward. Additional executives at the company are being investigated and could potentially face charges, she said.
The Justice Department officially handed down criminal and civil penalties for Volkswagen on Wednesday afternoon. Volkswagen has agreed to plead guilty to three criminal counts, a rare admission of wrongdoing for a major company, and pay $4.3 billion in fines.
“As you know we cannot put companies in jail, but we can hold their employees personally accountable and make companies pay hefty fines,” said FBI Deputy Director Andrew McCabe.
“This is reflection of the fact that faceless multinational corporations don’t commit crimes, people commit crimes,” added Sally Q. Yates, deputy attorney general.
Volkswagen will pay a $2.8 billion penalty to resolve the criminal charges. The company will pay an additional $1.5 billion to settle civil claims that it violated environmental, customs and finance laws as part of its deception.
The guilty plea and fines match the settlement terms Volkswagen outlined yesterday, when the company confirmed that “advanced discussions” with U.S. officials to resolve the charges were underway. The proposed deal still needed the approval of the company’s board.
The settlement must now be approved in court. That date has yet to be scheduled, a Justice Department spokesman said.
Volkswagen is charged with conspiring to defraud the government and violate environmental regulations from May 2006 to November 2015 by installing devices in its diesel engine vehicles that obscure the amount of nitrogen oxide they spew into the air. Those devices and accompanying software allowed Volkswagen to evade regulators for years, the Justice Department asserts.
However, Volkswagen falsely claimed that its vehicles met all environmental regulations in order to import and sell the affected vehicles in the United States from 2009 to 2015, according to the charges. In all, the emissions scandal touched 11 million vehicles worldwide, including more than half a million sold in the United States.
When U.S. officials finally caught onto the ruse, Volkswagen “did corruptly alter, destroy, mutilate and conceal business records” in order to obstruct the investigation, charging documents declare. In August and September 2015, a Volkswagen supervisor is accused of deleting emails and files related to the deceptive device and instructing employees to do the same, charging documents show.
Those criminal charges, which Volkswagen must still formally admit to in court, were also the basis for three civil allegations brought against the company.
A Volkswagen executive was arrested and charged in Miami earlier this week in connection with the Justice Department investigation. Wednesday’s plea agreement states that the agency will “not file additional criminal charges” against Volkswagen or its “direct or indirect affiliates and subsidiaries.”
Past Justice Department settlements with automakers, including Toyota and GM, allowed those companies to pay a fine without admitting to any wrongdoing.
Wednesday’s announcement will bring Volkswagen’s total fines to roughly $20 billion. The largest of those penalties was the $14.7 billion the company was ordered to pay to buyback cars and otherwise compensate customers impacted by the scandal.