VW pleads guilty, agrees to $4.3 billion settlement; five more executives charged

WASHINGTON (Bloomberg) -- Volkswagen took a major step toward resolving one of the darkest chapters in its history Wednesday, pleading guilty to an emissions-cheating scandal and agreeing to pay $4.3 billion in criminal and civil charges as the U.S. announced charges against five new individuals in Germany.

As part of its settlement, VW pleaded guilty to charges of conspiracy, obstruction of justice and using false statements to import cars to the U.S. 

The individuals are former VW brand head of development Heinz-Jakob Neusser; former VW head of engine development Jens Hadler; Richard Dorenkamp, who led a team of engineers that developed the first diesel engine designed to meet new U.S. emissions standards; former VW quality manager Bernd Gottweis; former environment and engineering office manager Oliver Schmidt; and quality manager Juergen Peter. 

“The investigation is still open and it is ongoing,” said Attorney General Loretta Lynch during the press conference. "Volkswagen knew of these problems and when regulators expressed concern Volkswagen obfuscated, they denied, and they ultimately lied."

"This announcement does not mean that our investigation is complete... We will continue to pursue the individuals responsible for orchestrating this damaging conspiracy," she added, declining to comment on specific individuals.

"But I will stress that we are looking at individuals who were involved and would have had knowledge of the same information that's currently being charged," she said. 

In 2014, as U.S. suspicions increased about the real level of emissions from VW diesel cars, engineers and supervisors plotted ways to hide the defeat device, according to court documents. The next year, when regulators threatened not to certify 2016 models for sale in the U.S., Volkswagen’s senior officials in Wolfsburg, Germany, were told at a July 27 meeting about the deception.

Senior VW managers approved a plan in August 2015 for what the automaker’s employees would say in an upcoming meeting with California regulators, prosecutors allege. That plan called for Volkswagen employees to continue concealing the existence of the emissions device.

"The agreements that we have reached with the U.S. government reflect our determination to address misconduct that went against all of the values Volkswagen holds so dear," VW CEO Matthias Mueller said in an emailed statement Wednesday.

Separate case

Separately, Volkswagen agreed to pay a civil penalty of $50 million to the Civil Division of the DOJ to settle potential claims asserted under the Financial Institutions Reform, Recovery and Enforcement Act.

"Volkswagen specifically denies any liability and expressly disputes these claims, which it is settling to avoid the uncertainty and expense of protracted litigation," it said in relation to the FIRREA penalty.

Click here for the DOJ press release and other documents.

The court filings detail a scheme in which the German automaker deceived regulators and customers for years, and dozens of employees destroyed documents, even after the scandal broke in September 2015.

The emissions-cheating disclosures undermined the sterling reputation of German engineering and threatened the viability of a company that vies with Toyota Motor Corp. as the world’s biggest carmaker. Volkswagen pressed to resolve investigations and lawsuits as quickly as possible, while working to repair its reputation with car buyers and dealers. It’s now selling more cars and trucks then ever, offsetting declines in the U.S. with strong sales in China.