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Former Volkswagen CEO charged with fraud in Germany

Former Volkswagen CEO charged with fraud in Germany

April 16th, 2019 in Business

FILE - In this Jan. 19, 2017 file photo Martin Winterkorn, former CEO of the German car manufacturer 'Volkswagen', arrives for a questioning at an investigation committee of the German federal parliament in Berlin, Germany. (AP Photo/Michael Sohn, file)

FRANKFURT, Germany (AP) — German prosecutors charged former Volkswagen CEO Martin Winterkorn and four others with fraud in the emissions cheating scandal that has helped turn many Europeans against diesel engines and accelerated the push toward electric cars.

Prosecutors said Monday Winterkorn knew about the scheme since at least May 2014 and failed to put a stop to it.

That contradicted his claim that he didn’t learn about it until shortly before U.S. investigators announced it in September 2015. Winterkorn resigned as CEO five days later.

VW has admitted installing software in its diesel cars that turned on pollution controls when vehicles were being tested and switched them off during everyday driving. That made it look as if the cars met tough U.S. limits on harmful pollutants known as nitrogen oxides.

In all, some 11 million cars worldwide were equipped with the illegal software.

Prosecutors said the defendants — all top Volkswagen managers — were part of a deception that started in 2006.

The 71-year-old Winterkorn and the others, whose names were not released, face six months to 10 years in prison if convicted of aggravated fraud involving serious losses. Other charges include unfair competition and breach of trust.

Prosecutors said the defendants could also be forced to forfeit sales bonuses ranging from $340,000-$12.45 million.

Winterkorn is already under indictment in the U.S. on charges of fraud and conspiracy to violate the Clean Air Act and could get up to 20 years in prison. However, he cannot be extradited from Germany to the U.S.

Winterkorn’s attorney, Felix Doerr, said the defense could not comment on the German case because prosecutors had not provided adequate opportunity to review the case files. Doerr said prosecutors turned over seven DVDs with hundreds of file folders of material April 5.

The case, consisting of a 692-page indictment backed by 300 file volumes holding 75,000 pages, was filed Friday in a local court in Braunschweig. The court will decide if the case will proceed to trial.

Prosecutors said among other things that the defendants carried out a software update costing 23 million euros in 2014 to try to cover up the true reason for the elevated pollution during driving.

The prosecutors said they are still investigating 36 more suspects.

Volkswagen’s corporate involvement in the Braunschweig investigation ended last year with a 1 billion euro fine. Volkswagen noted the indictment was against individuals and had no further comment.

The prosecutors’ move is only one of the legal proceedings unleashed by the scandal.

Volkswagen has paid more than $31 billion in fines and civil settlements with authorities and car owners since getting caught.

The automaker apologized and pleaded guilty to criminal charges in the United States, where two executives were sentenced to prison and six others charged, although they could not be extradited.

And the U.S. Securities and Exchange Commission charged the company and Winterkorn on March 15 with defrauding investors through misleading statements about vehicle quality and environmental compliance.

Investors in Germany are also seeking damages.