German automobile company and the world’s biggest automaker, Volkswagen (VW), is facing significant legal problems, including potential criminal charges, arising from its admission that 11 million of its diesel vehicles sold worldwide contained software specifically designed to help cheat emissions tests.
The models affected include the VW Jetta, Beetle and Golf from 2009 through 2015, the Passat from 2014-2015 as well as the Audi A3, model years 2009-2015.
Volkswagen’s scheme was discovered last year by a West Virginia laboratory that was commissioned by a clean energy advocacy group that had raised questions about emission levels in diesel vehicles.
For more than a year, VW argued to U.S. officials that it was not doing anything wrong. Only recently did VW admit to them that it had installed defeat devices in the cars to get around emissions standards.
The company has been ordered to recall about 500,000 cars, and it has suspended sales. U.S. regulators say the cars are safe to drive.
they however recommend that for now, owners do nothing differently. But eventually the cars will need to be repaired so they can pass emissions test without cheating.
The problem is potentially much bigger in Europe. The German government said 2.8 million vehicles in Germany were affected by Volkswagen’s illegal manipulation.
With David M. Uhlmann, a former chief of the Justice Department’s Environmental Crimes Section, who is now a law professor at the University of Michigan, Calling the criminal charges almost certain.
He said; “If there is sufficient evidence to show that Volkswagen intentionally programmed its vehicles to override the emission control devices, the company and any individuals involved could face criminal charges under the Clean Air Act, and for conspiracy, fraud and false statements.”
Volkswagen has already set aside 6.5 billion euros ($7.3 billion) to cover recalls and other costs, a bill likely to rise, with U.S. authorities likely to impose up to $18 billion penalties for breaching the emission limits. Germany could also slap Volkswagen with fines, and owners and dealers will demand compensation.
The company has apologized, but has not yet detailed who was responsible for the defeat devices.
Volkswagen has promised to work with German prosecutors. Employees held responsible could be prosecuted for fraud, if convicted, they will face big individual fines and could be sentenced to a maximum of 10 years imprisonment.
About a quarter of the company’s market has dropped, the scandal has already trashed Volkswagen’s financial forecasts for the year.
It’s not the first time Volkswagen has been accused of cheating on emissions testing. In July 1973, the Environmental Protection Agency found that VW had installed temperature-sensitive devices that turned off emissions controls on about 25,000 Fastback, Squareback and bus models. The company agreed to remove the devices and eventually settled with the Justice Department, paying a $120,000 penalty.
CEO Martin Winterkorn resigned on Wednesday, and since then has been replaced by Matthias Mueller, the CEO of Porsche.