SAN FRANCISCO—A Volkswagen executive was arrested on Saturday, January 7 in Florida, accused of conspiring to defraud federal regulators over the use of special software that cheated emissions tests.
Oliver Schmidt served as the general manager for the Volkswagen U.S. Environmental Regulatory Compliance office from 2012 to 2015, and was arrested and charged in a criminal complaint with conspiracy to defraud the U.S. government and wire fraud.
Volkswagen admitted in September 2015 that between 2009 and 2015 the automaker installed defeat device software, which could recognize when a vehicle was connected to the emissions evaluation testing, and decrease the vehicle’s nitrogen oxide emissions low enough to pass American standards. Once the software recognizes that the vehicle was back on the road, the device would switch off, allowing up to 40 times above the American Standards to be admitted.
The FBI complaint accused VW of deliberately misleading regulators about cheating pollution tests in the United States, but did not charge the company with a crime. A presentation was given by Schmidt and other employees about the “defeat device” around July 27, 2015, more than a month before the automaker disclosed the device to U.S. regulators in September 2015, the complaint said.
Schmidt is the second Volkswagen employee that’s been arrested in lieu of the alleged conspiracy. Last fall, Volkswagen engineer James Liang was arrested after pleading guilty to being involved in the conspiracy.
Liang, two Volkswagen employees and two California Air Resource employees provided testimonies in the case, agreeing to comply with the government in order to evade prosecution.
The testimonies alleged the executive knew about the devices and overlooked any admission test results as “irregularities,” in an attempt to conceal the device.
“It should first be decided whether we are honest. If we are not honest, everything stays as it is,” Schmidt allegedly wrote in an email to his colleagues concerning a commissioned study by the International Counsel on Clean Transportation, which noted discrepancies between the vehicles’ day-to-day NOx output and emissions during testing. “ICCT has stupidly just published measurements of NAR diesel off-cycle, not good.”
“Difference between street and test stand must be explained … intent = penalty!” Schmidt allegedly noted in a later email to VW America’s then-CEO.
The automaker has recently come to a $15 billion settlement which entails VW buying back or repairing all defective vehicles, as well as paying billions towards environmental remediation.
“It would not be appropriate to comment on any ongoing investigations or to discuss personnel matters,” said Volkswagen regarding the matter.