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Volkswagen pleads guilty in US over emissions scandal

Company admits fraud, obstructing of justice and importing goods by false statement

About 600,000 cars sold in the US were affected by the emissions scandal, which is likely to cost the company €23bn. Photograph: Mike Blake/Reuters

Patrick McGee Frankfurt
Fri Mar 10 2017 - 19:54

Volkswagen pleaded guilty to three criminal counts in a US courtroom on Friday over its diesel emissions scandal.

The world's largest carmaker in January reached a settlement with US prosecutors under which it admitted to three felonies, after Washington-based regulators revealed VW had equipped diesel cars with software that served to understate emissions of harmful nitrogen oxides in official tests.

The emissions cheating ranks as the worst crisis in the Germany company’s history.

In a Detroit court, Manfred Döss, VW’s general counsel, pleaded guilty on behalf of the company to counts of fraud, obstructing of justice and importing goods by false statement.

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“Your honour, VW AG is pleading guilty to all three counts because it is guilty on all three counts,” he told the judge.

Friday’s hearing was the first time VW had admitted guilt in a court.

Financial burden

VW acknowledged its emissions cheating in September 2015, saying up to 11 million diesel cars had been affected, and it has since set aside almost €23 billion to cover fines and other costs relating to the scandal.

The biggest portion of this money is focused on buying back cars in the US caught up in the affair, and paying the owners compensation. About 600,000 cars sold in the US were affected.

Assistant US attorney John Neal said VW's actions were a "calculated offence", not a "momentary lapse of judgment".

US district judge Sean Cox accepted VW's pleas and said he would consider a motion to allow additional restitution to victims.

He set a sentencing date for April 21st. “This a very, very, very serious crime. It is incumbent on me to make a considered a decision,” he said.

The US Department of Justice has charged seven VW executives and employees over their alleged involvement in the scandal.

Meanwhile, German prosecutors are investigating 37 individuals over the affair, including former VW chief executive Martin Winterkorn.

In Europe, VW admitted installing cheat software in almost 9 million diesel cars, but argued the technology did not breach EU laws. The company is resisting pressure from the European Commission and other politicians to pay compensation to European owners of cars affected by the scandal.

– Copyright The Financial Times Limited 2017

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