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VW executive charged with conspiracy in connection with Dieselgate emissions cheating

Oliver Schmidt, the former chief emissions compliance manager for Volkswagen in the U.S., was arrested this week by the FBI on charges of conspiracy to defraud the federal government. Schmidt is accused of playing a key role in the conspiracy to hide Volkswagen’s diesel emissions cheating from U.S. regulators as part of the Dieselgate scandal.

In September 2015, Volkswagen admitted that it had installed a software defeat device on 11 million VW and Audi diesel models. This defeat device was programmed to lower the emissions levels of the affected vehicles during emissions testing, making them appear to emit far lower pollution levels than they did under normal driving conditions. Although the vehicles appeared to emit allowable levels of greenhouse gasses during inspection, the affected models released up to 40-times the allowable pollution levels under the Clean Air Act.

After Volkswagen’s emissions cheating was first discovered by researchers in West Virginia in 2014, Schmidt allegedly played a key role in Volkswagen’s efforts to convince federal regulators that excessive emissions levels in VW’s diesel-powered vehicles were caused by a technical error, rather than deliberate emissions cheating by the company. Volkswagen later admitted that it had deliberately concealed the high emissions levels of its diesel models through the use of a software defeat device that had been installed on more than 11 million vehicles.

Allegations of Emissions Cheating Against Volkswagen

According to charges filed by the federal government, Schmidt was instrumental in VW’s effort to deceive U.S. regulators “by offering reasons for the discrepancy other than the fact that VW was intentionally cheating on U.S. emissions tests, in order to allow VW to continue to sell diesel vehicles in the United States.” Even after Volkswagen admitted to its role in the emissions scandal, Schmidt continued to represent the company in government hearings about Dieselgate in the U.K.

Schmidt was also accused of playing a central role in Volkswagen’s efforts to deceive regulators about its emissions cheating in lawsuits filed by state attorney generals in New York and Massachusetts. The lawsuits cite repeated claims from Schmidt while he was general manager of Volkswagen’s Engineering and Environmental Office that the high emissions levels observed in VW’s diesel models were caused by false technical explanations, rather than deliberate emissions cheating by the company.

Volkswagen’s prolonged efforts to hide its emissions cheating and belated confession are said to have angered officials at the California Air Resources Board (CARB) and Environmental Protection Agency (EPA) who were investigating the Dieselgate allegations. Legal experts say that these factors may have vastly increased Volkswagen’s costs to resolve the emissions scandal. In 2016, Volkswagen agreed to pay $15 billion to settle allegations of emissions cheating related to the Dieselgate scandal with Audi and VW diesel owners. The company is expected to face billions more in fines related to the scandal.

Schmidt is not the first Volkswagen employee to face criminal charges in the U.S. over the Dieselgate emissions scandal. In September 2016, former Volkswagen engineer James Liang pleaded guilty to charges of conspiracy to defraud the federal government and violating the Clean Air Act. However, Schmidt’s arrest makes him the first VW executive to face criminal charges over the Dieselgate scandal.

Sources say that Volkswagen and the Justice Department are nearing a settlement in the federal government’s criminal investigation into VW’s emissions cheating. Volkswagen is expected to pay $2 billion as part of the settlement. The company or one of its subsidiaries is also expected to plead guilty as part of the settlement, which could be announced as early as next week.

Emissions Cheating Lawsuits Filed by Heygood, Orr & Pearson

The lawsuits filed against Volkswagen over the Dieselgate scandal is not the only legal action against a major automaker over allegations of emissions cheating. Audi and Chrysler are both currently facing claims that they installed defeat devices on their gasoline-powered models in an effort to conceal the high emissions levels of these vehicles from drivers and federal regulators.

The lawyers at Heygood, Orr & Pearson have represented numerous VW and Audi diesel owners in their claims against Volkswagen over the company’s emissions cheating in the Dieselgate scandal. One of our partners, Michael Heygood, was named to the Plaintiffs’ Steering Committee that helped negotiate the settlement with Volkswagen as part of the Multidistrict Litigation against the automaker in California.

Heygood, Orr & Pearson is also representing owners of Audi A6, A8, Q5, Q7, S4, S5, S6, and S7 automatic gasoline models and Dodge RAM 1500, 2500, or 3500 and Jeep Grand Cherokee diesels owners whose vehicles were affected by emissions cheating by the respective manufacturers. Drivers who purchased or leased one of the vehicles affected by emissions cheating on the part of Audi or Chrysler may qualify to take legal action.

For more information about the allegations of emissions cheating against Volkswagen, Audi, and Chrysler and to find out whether you may qualify to file a lawsuit, contact the lawyers at Heygood, Orr & Pearson for a free legal consultation. You can reach us by calling toll-free at 1-877-446-9001, or by following this link to our free case evaluation form and answering a few brief questions to get started.

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