FBI Arrests First VW Exec Over Dieselgate Scandal

by under News on 11 Jan 2017 12:22:26 PM11 Jan 2017

The scandal that won’t go away.

FBI Arrests First VW Exec Over Dieselgate Scandal

As the brand’s top brass flew into the United States to attend the Detroit Motor Show, the Federal Bureau of Investigation (FBI) took the opportunity to arrest the former emissions regulations boss of Volkswagen USA for conspiring to defraud the United States regulators regarding the diesel emissions of their engines. 

The charge was read to Oliver Schmidt, 48, on Monday at a US District Court in Miami, where he was arrested at the airport as he was making his way back to Germany, on Monday. A plea was not entered by him nor his counsel, and the judge ordered he be held pending a hearing on Thursday by US Magistrate Judge William Turnoff. Schmidt was dressed in orange jail attire, replete with shackles, and was charged with not disclosing a cheating device that was designed to defraud US diesel emissions tests for almost a decade. 

Schmidt’s lawyer, David Massey, said that his client had learned of the investigation and had reached out to authorities to cooperate, and even met with FBI agents in London last year. The complaint filed against Volkswagen accuses the German automotive conglomerate of “deliberately misleading regulators about cheating pollutions tests in the United States.” According to an Autonews Europe report, Volkswagen's US management was briefed by their staff regarding the “existence, purpose, and characteristics” of an emissions cheating device as early as July 2015, but did not immediately disclose that information.

Damningly, it was revealed by the FBI that Schmidt knowingly deceived regulators, as he wrote in an email exchange with another executive, as be pondered whether or not Volkswagen ought to admit to their defrauding. “It should be first decided whether we are honest,” he said. “If we are not honest, everything stays as it is.” Pursuant to the decision to knowingly lie to regulators, Schmidt was one of several executives that conceived a plan to hide the emissions cheating software from the US regulators in August 2015. In another email correspondence from Schmidt, he explained that one employee in particular would miss a meeting with emissions regulators in California “so he would not have to consciously lie.”

FBI Arrests First VW Exec Over Dieselgate Scandal

The complaint filed against Schmidt detailed when things came to a head: “In the summer of 2015, Schmidt agreed to travel to the United States to participate in direct conversations with U.S. regulators in which he intended to, and did, deceive and mislead U.S. regulators by offering reasons for the discrepancy other than the fact that VW was intentionally cheating U.S. emissions tests, in order to allow VW to continue to sell diesel vehicles in the United States.” 

The full complaint can be viewed here.

The arrest of Oliver Schmidt has sent waves through the Volkswagen Group, with members of top management surprised not only at the move taken by the US government, but the timing of the arrest: The beginning of the year is regarded as ‘motor show season’ to the automotive industry, and since the Dieselgate scandal broke, Volkswagen has been doing its level best to reposition itself as an ecologically-responsible company by launching one ecologically-sound product after another. 

Volkswagen’s legal counsel has advised that the company and its employees not comment on an ongoing investigation, and have instructed their clients not to leave Germany. The United States justice department is planning several more arrests of prominent VW staff over the coming weeks as part of its investigation into the Dieselgate scandal, though details of whom they are targeting remains scarce. 

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