Consumer Fraud

VW Exec Gets 7-Year Sentence for Emissions Cheat Role

VW consumer fraud 375x210 VW Exec Gets 7 Year Sentence for Emissions Cheat RoleA top-ranking Volkswagen executive in the U.S. received a seven-year prison sentence after pleading guilty to criminal charges connected to the automaker’s emissions cheating scandal.

Oliver Schmidt, a German citizen who served as a Michigan-based liaison between VW and U.S. regulators pleaded guilty in August to one count of conspiracy to defraud the U.S. and one count of violating the Clean Air Act.

Federal Judge Sean Cox in Detroit sentenced Mr. Schmidt to seven years, the maximum allowable sentence for his offenses and the punishment that federal prosecutors had sought. Mr. Schmidt had asked the judge to cap his sentence at 40 months, according to Bloomberg.

“I only have myself to blame,” Mr. Schmidt said before Judge Cox read the sentence, according to Bloomberg. He admitted that he tried to conceal VW’s cheating and told the judge, “I accept the punishment.”

“In my opinion, you were a key conspirator, responsible for the cover-up in the United States,’’ Judge Cox told Mr. Scmidt. According to Bloomberg, Mr. Schmidt worked with other VW executives to conceal the fraud, using it as an “opportunity to shine, and climb the corporate ladder,’’ Judge Cox asserted, calling Mr. Schmidt’s offenses “very serious” and “troubling.”

Mr. Schmidt is the highest-ranking VW official to be charged for helping VW cheat U.S. emissions laws. The German automaker coded its diesel vehicles to spew emissions at up to 40 times the allowable limit but then switch on pollution controls during emissions testing to dupe regulators.

After a University of West Virginia study blew the lid off the emissions cheat, VW tried to convince federal investigators that excessive emissions in the vehicles were the result of technical problems and that it did not deliberately engineer vehicles to cheat emissions tests. The FBI found ample evidence that Mr. Schmidt played a central role in the attempted coverup.

Mr. Schmidt was sentenced to 60 months for defrauding the U.S. and 24 months for the Clean Air Act violations. He was also ordered to pay the U.S. $400,000.

Federal prosecutors continue to investigate VW and its executives. Mr. Schmidt is the second VW executive to be sentenced for his role in the emissions cheat. In August, James Liang, an American engineer who developed VW’s emissions cheat, was sentenced to 40 months in prison after pleading guilty to conspiracy. He is appealing his sentence.

Mr. Schmidt was arrested nearly a year ago in Miami. According to the New York Times, the circumstances of his arrest are “something of a fluke”:

Having been transferred back to Germany, he came to the United States for a vacation with his wife and was seized as he waited for a departing flight in Miami. Why he risked arrest by traveling to the United States remains a mystery.

The U.S. government has indicted five other VW executives, but they remain in Germany out of reach of U.S. authorities. “They include executives who led engine development as well as the failed efforts to design a diesel engine that would meet the tougher emissions standards the U.S. adopted for 2007, as well as another liaison to U.S. regulators,” Bloomberg reported.