Volkswagen AG and the U.S. government are nearing an agreement in which the German automaker would plead guilty to criminal misconduct for its emissions scandal and pay $4.3 billion in criminal and civil penalties, the company confirmed Tuesday.
The penalties would resolve allegations that VW programmed more than half a million diesel-powered vehicles in the U.S. with codes that allowed the vehicles to cheat emissions testing.
The announcement closely follows the weekend arrest of Oliver Schmidt, the former top VW emissions compliance manager for Volkswagen in the U.S. The FBI arrested Mr. Schmidt after gathering evidence that he intentionally misled auto regulators investigating the suspected emissions cheat, known as a “defeat device.” Bloomberg reports that U.S authorities are poised to prosecute additional high-ranking VW executives in Germany in connection with the scandal.
“This appears to be the largest auto manufacturer fine ever imposed by the U.S. Justice Department, but under the circumstances of this particular case it is warranted,” said Beasley Allen lawyer W. Daniel “Dee” Miles, who heads the firm’s Consumer Fraud Section. Miles is one of the 22 attorneys appointed by U.S. District Judge Charles Breyer to the Plaintiffs Steering Committee.
As part of the settlement agreement, VW is required to accept an independent monitor to oversee the company’s regulatory actions for three years.
The proposed penalty pushes VW’s total costs incurred in the emissions scandal to nearly $22 billion in the U.S. The company previously agreed to separate civil settlements worth about $17 billion, providing relief in the form of buybacks and repairs to U.S. consumers and auto dealers affected by the scandal as well as investments in clean-air projects and technologies.
VW is also undergoing a criminal investigation in Germany, and it may be forced to square with other countries where some 11 million additional diesel vehicles with emissions cheats were sold.
The drafted settlement agreement with U.S. Department of Justice and U.S. Customs and Border Protection will need to be approved by VW’s management and supervisory boards, which are expected to review it before Thursday, Jan. 12.