VW exec who oversaw U.S. environmental compliance pleads guilty to lesser charges

on Aug4

Oliver Schmidt said he was made aware of “defeat device” software in Volkswagen vehicles in the summer of 2015. He then submitted fraudulent and misleading Emissions Defect Information Reports to the federal government for vehicles with the defeat devices.

DETROIT — Oliver Schmidt, the former chief of Volkswagen AG’s environmental and engineering center in Michigan, pleaded guilty to reduced charges Friday as part of a plea deal for his role in the company’s diesel emissions scandal.

Schmidt, wearing shackles and a burgundy jail uniform, pleaded guilty in U.S. District Court here to charges of conspiracy to defraud the United States and violating the Clean Air Act. A third charge of aiding and abetting wire fraud that was originally expected to be part of the plea was rolled into the conspiracy charge.

Schmidt, a German citizen, will remain in custody until sentencing on Dec. 6.

Under the terms of a plea agreement with federal prosecutors, he faces up to 84 months in prison and a fine ranging from $40,000 to $400,000. Although the agreement does not call for him to pay any restitution, it would require him to be deported after completing the sentence.

The plea agreement does not include any mention of Schmidt agreeing to cooperate with prosecutors.

Schmidt was originally charged with 11 felony counts. Federal prosecutors said at the time that he could face a maximum of 169 years in prison.

The deal allows Schmidt​ to avoid a trial that likely would have been lengthy. As part of the plea and proceeding, Schmidt admitted he was aware that the company for years used “defeat device” software to cheat on U.S. emissions tests. He also admitted to being involved with other company executives on how to answer questions about discrepancies with the emissions of the affected vehicles without revealing the defeat devices.

He said he was made aware of the software in the summer of 2015. He then submitted fraudulent and misleading emissions defect information reports to the federal government for vehicles with the defeat devices.

Schmidt, aside from reading prepared remarks about why he believes he is guilty, spent most of the proceeding replying directly to U.S. District Judge Sean Cox with “yes, your honor” or “no, your honor.”

A lawyer for Schmidt, David DuMouchel, declined to comment.

Schmidt has been held since January when he was arrested in Miami while trying to return to Germany. It was unclear whether Schmidt is still employed by the company. He has been in custody since his arrest and was denied bail.

He is one of eight current and former executives charged in the U.S. emissions probe. However, most charged are in Germany and may not travel to the United States because Germany typically does not extradite its citizens.

In July, the Justice Department charged former Audi manager Giovanni Pamio with directing employees to design software enabling thousands of Audi diesel cars to beat U.S. emissions tests. He was arrested in Germany.

James Liang, a VW employee who pleaded guilty to misleading regulators, is cooperating with prosecutors and is expected to be sentenced on Aug. 25.

Volkswagen has agreed to spend as much as $25 billion in the U.S. to resolve claims from owners and regulators over polluting diesel vehicles and offered to buy back about 500,000 vehicles.

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