Former VW engineer Liang sentenced to 40 months, $200,000 fine

on Aug28

James Liang, a diesel expert who’s been with VW for more than 30 years, aided prosecutors as they built their case against higher-level VW executives. Photo credit:

UPDATED: 8/25/17 4:29 pm ET – adds DOJ statement

DETROIT — A former Volkswagen AG engineer who cooperated with investigators in the automaker’s global diesel emissions scandal was sentenced to 40 months in a federal prison and a $200,000 fine for his role in the conspiracy.

James Liang, 63, a native of Indonesia but a citizen of Germany, was sentenced in U.S. District Court here on Friday before Judge Sean Cox.

Liang, a diesel expert who’s been with VW for more than 30 years, aided prosecutors as they built their case against higher-level VW executives for their alleged roles in a global conspiracy to cheat on diesel emissions. Prosecutors said Liang “provided an insider’s perspective of a company that had lost its ethical moorings in pursuit of increased market share and corporate profits.”

Liang’s attorney, David Nixon, had asked the court to impose a sentence as low as 21 months of house arrest, while prosecutors had sought three years of prison — two years less than the maximum five-year sentence for the conspiracy charge.

But Cox said that, despite Liang’s cooperation with authorities, he had been a key enabler of VW’s ability to cheat diesel emissons standards, and that Liang had been “too loyal” to his lifelong employer, who was paying his rent on a 3,600-square-foot, five-bedroom home in an exclusive area of Southern California. He also said he wanted to impose a sentence that would be a message to other employees in the industry who might be asked by their employers to do illegal deeds.

“It seems to me that you certainly didn’t want to walk away from this lifestyle in Southern California, with this lifestyle and this income … which would have been the right thing to do,” Cox said. “In my mind, this is a serious crime, and it involves a massive fraud on the American consumer, which you knew, and you played a role in.”

Acting U.S. Attorney Daniel L. Lemisch said in a statement that the sentence “sends a strong message of deterrence to automotive engineers and executives who should think twice before knowingly breaking United States laws for the benefit of their employer.”

David P. Gelios, special agent in charge, Detroit Division of the FBI, said in the statement:

“The actions of James Robert Liang and others with which he conspired to fraudulently represent that Volkswagen AG was in compliance with regulatory emissions standards significantly impacted thousands of victim consumers. Today’s sentencing is significant as it demonstrates there is and will be personal culpability for corporate executives who knowingly cheat American consumers, violate federal laws, and purposely utilize technologies that further endanger our environment.”

In March, Volkswagen pleaded guilty to three felony counts under a plea agreement to resolve U.S. charges that it installed secret software in vehicles in order to cheat on emissions tests.

Oliver Schmidt, a former VW executive, pleaded guilty in federal court in Detroit in connection with the scandal. He faces up to seven years in prison and a fine of up to $400,000 after admitting to conspiring to mislead U.S. regulators and violating clean air laws. Schmidt will be sentenced on Dec. 6. In court Friday morning, Cox said he took Schmidt’s case into consideration in Liang’s sentence.

U.S. prosecutors have charged eight current and former Volkswagen executives so far in the conspiracy. Along with Schmidt and Liang, those indicted earlier included Heinz-Jakob Neusser, former head of development for the VW brand and two former heads of engine development, Jens Hadler and Richard Dorenkamp.

In a statement, VW said it “continues to cooperate with investigations by the Department of Justice into the conduct of individuals. It would not be appropriate to discuss personnel matters.”

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