The former general manager of Volkswagen AG’s (VW) U.S.
Environment and Engineering Office was sentenced today 84 months in prison for
his role in VW’s scheme to sell diesel “clean diesel” vehicles containing
software designed to cheat U.S. emissions tests.
Acting Assistant Attorney General John P. Cronan of the
Justice Department’s Criminal Division, Deputy Assistant Attorney General Jean
E. Williams of the Justice Department’s Environment and Natural Resources
Division, Acting U.S. Attorney Daniel L. Lemisch of the Eastern District of Michigan,
Special Agent in Charge David P. Gelios of FBI’s Detroit Field Office and
Acting Assistant Administrator Larry Starfield, for the Environmental
Protection Agency (EPA)’s Office of Enforcement and Compliance Assurance made
the announcement.
Oliver Schmidt, 48, a citizen and resident of Germany, was
sentenced by U.S. District Judge Sean F. Cox of the Eastern District of
Michigan, who also ordered Schmidt to pay a criminal penalty of $400,000. Schmidt pleaded guilty on Aug. 4 to one count
of conspiracy to defraud the United States, to commit wire fraud and to violate
the Clean Air Act, and to one count of violating the Clean Air Act.
“Upon learning of Volkswagen’s massive scheme to defraud and
mislead U.S. consumers and regulators, Oliver Schmidt chose to join the
conspiracy and deceive U.S. regulators,” said Acting Assistant Attorney General
Cronan. “This case, along with the prior
prosecution of the company and another Volkswagen engineer, further demonstrate
the Criminal Division’s unwavering commitment to hold both corporations and
individuals accountable for their wrongdoing.”
“Oliver Schmidt cheated the American people, and today’s
sentencing shows that such behavior will be prosecuted to the fullest extent of
the law,” said Deputy Assistant Attorney General Williams. “The Department of
Justice and its partner agencies will continue to work together to ensure a
level playing field for all competitors and a cleaner environment for all
Americans.”
“This sentence reflects how seriously we take environmental
crime,” said Acting U.S. Attorney Lemisch.
“Protecting natural resources is a priority of this office.
Corporations, and individuals acting on behalf of corporations, will be brought
to justice for harming our environment.”
“Americans expect corporations to follow laws and
regulations designed to protect consumers and the environment,” said FBI
Special Agent in Charge Gelios. “The
sentence of Mr. Schmidt demonstrates the Department of Justice’s commitment to
hold companies that defraud their customers both personally, as well as,
corporately accountable for their crimes.”
“As this case demonstrates, EPA is committed to ensuring a
level playing field for companies that follow the rules and pursuing
individuals whose actions create an unfair competitive advantage for their
employer,” said EPA Acting Assistant Administrator Starfield.
In connection with his guilty plea, Schmidt admitted that he
agreed with VW employees to mislead and defraud the United States and domestic
customers who purchased diesel vehicles, and to violate the Clean Air Act. Schmidt first learned during the summer of
2015 that certain VW diesel vehicle models contained a defeat device, or
software that detected the difference between when the car was undergoing
standard U.S. emissions testing and when it was being driven under normal
conditions on the road. If the vehicle
recognized that it was not being tested, many of its emissions control systems
were significantly reduced, resulting in NOx emissions that were sometimes 30
times higher than U.S. standards.
Schmidt admitted to participating in discussions with other VW employees
in the summer of 2015 on how to coordinate responses to questions from U.S.
regulators about VW’s diesel vehicles without admitting to the defeat device
contained in vehicles. On the
instructions of management, Schmidt met with U.S. regulators twice in August
2015 and attempted to obtain approval for the sale of additional VW diesel
vehicles without disclosing what he knew was the truth – that the real reason
for the high emissions on the road was that VW had intentionally installed
software designed to cheat emissions testing.
Schmidt further admitted that he knew during his
participation in the conspiracy that the VW “clean diesel” vehicles were being
marketed to the public as being environmentally friendly and promoting
increased fuel economy while complying with U.S. environmental
regulations. Schmidt knew that VW’s
diesel vehicles were not compliant with U.S. standards and regulations and that
these representations made to domestic customers were false, he admitted.
As part of his guilty plea, Schmidt agreed that during his
participation in the scheme, he and his co-conspirators caused losses to
victims of more than $150 million and that he obstructed justice.
The FBI’s Detroit Field Office and the EPA’s Criminal
Investigation Division are investigating the case, with assistance from U.S.
Immigration and Customs Enforcement’s Homeland Security Investigations. Securities and Financial Fraud Unit Chief
Benjamin D. Singer and Trial Attorney David M. Fuhr of the Criminal Division’s
Fraud Section, Senior Trial Attorney Jennifer Blackwell of the Environment and
Natural Resources Division’s Environmental Crimes Section and White Collar
Chief John K. Neal of the U.S. Attorney’s Office for the Eastern District of
Michigan are prosecuting the case.
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