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Volkswagen to pay US$2.8 billion in United States diesel emission scandal

22 April 2017

A federal judge in Detroit on Friday sentenced Volkswagen AG to three years' probation and independent oversight for the German automaker's diesel emissions scandal as part of a $4.3 billion settlement announced in January.

Judge Sean Cox is holding a hearing Friday morning in federal court in Detroit.

The $4.3 billion settlement was reached in January between Volkswagen and the U.S. Justice Department.

Regulators in 2015 discovered that Volkswagen diesel cars, marketed as clean, in fact spewed up to 40 times the permissible limits of nitrogen oxide during normal driving, but this was hidden during emissions testing.

Damages for the entire United States emissions scandal earlier have topped now about $26bn, including criminal and civil settlements agreed earlier this year.

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Even after that admission, company employees were busy deleting computer files and other evidence, VW's general counsel Manfred Doss acknowledged to Judge Cox.

The German automaker is paying $1.5 billion in civil penalties in the case and already has agreed to pay $11.2 billion to buy back or fix diesel cars in the USA, and contribute another $4.7 billion to federal efforts to reduce pollution.

"This is a deliberate and massive fraud perpetrated on the American consumer, and it would seem, consumers throughout the world", he said. He said the iconic automaker is in a "very serious and troubling" case. Volkswagen offered an apology in court.

In March, attorneys for both the government and Volkswagen asked Cox to accept the plea and immediately sentence the company to $2.8 billion in criminal fines. He added, Plain and simple it was wrong. "We let people down and for that we are deeply sorry", Mr. Döss said. Volkswagen, which remains under investigation in Germany, has reached settlements in the USA with consumers, regulators, dealers, state attorneys general and federal prosecutors.

Volkswagen, now the world's largest automaker, could have been fined anywhere from $17 billion to $34 billion under US law but was said to be cooperative, engaged - save for a few executives and workers who obstructed the investigation - and actively correcting its corporate culture. Seven employees have also been charged. Judge Cox denied a recent bail request from Mr. Schmidt, who remains imprisoned in MI until he faces trial early next year.

Volkswagen to pay US$2.8 billion in United States diesel emission scandal