Former VW CEO Winterkorn investigated for fraud by German prosecutors

BERLIN -- German prosecutors said they are investigating former Volkswagen Group CEO Martin Winterkorn on suspicion of fraud as they expand a probe into the automaker's emissions test-cheating scandal.

Prosecutors said Winterkorn may have known about the manipulation sooner than he has so far said publicly.

Prosecutors in Brunswick near VW's Wolfsburg base said on Friday that 28 homes and offices were searched this week in connection with the investigation.

They said they had increased the number of people accused in connection with the scandal to 37 from 21, including Winterkorn. He is already being probed by prosecutors over possible market manipulation.

"Sufficient indications have resulted from the investigation, particularly the questioning of witnesses and suspects as well as the analysis of seized data, that the accused (Winterkorn) may have known about the manipulating software and its effects sooner than he has said publicly," German prosecutors said in a statement.

It will take weeks to sift through everything found in this week's raids, prosecutors said.

VW pledged full cooperation with prosecutors but declined further comment.

Winterkorn and VW brand chief Herbert Diess have already been subject of an investigation by Braunschweig prosecutors over suspicions of possible market manipulation. Prosecutors are now also probing the former CEO on suspicion of fraud.

VW has said its executive board did not learn of the software violations until late August 2015 and formally reported the cheating to U.S. authorities in early September that year.

Winterkorn told a German parliamentary committee of inquiry into the scandal on Jan. 19 that he did not know about the software cheating earlier.

"For now, Dr. Winterkorn is sticking with the statement he made before a German parliamentary committee of inquiry (into the scandal) on Jan. 19," Felix Doerr, a Frankfurt-based lawyer for Winterkorn, said in an emailed statement.

In the U.S., seven former and current VW executives not including Winterkorn have been charged in connection with the scandal.

One engineer, James Liang, has already pleaded guilty and is awaiting sentencing for his role in rigging emissions software on 2.0-liter diesels sold in the U.S., the first criminal charge in the U.S. government’s probe into the VW scandal. Another executive, Oliver Schmidt, was arrested in Miami earlier this month and is being held without bail. The other five remain in Germany, prosecutors have said. 

The widening of the investigation will add to the carmaker's legal headaches and be grist to the mill of investors seeking 8.8 billion euros ($9.41 billion) in damage claims for the collapse of VW's share price after the scandal broke.

Winterkorn denied any wrongdoing when he quit on Sept. 23, 2015, but said he was clearing the way for a fresh start at VW with his resignation. Winterkorn ran the German group for more than eight years.

In total, VW has now agreed to spend up to $23 billion in the U.S. and Canada to address claims from owners, environmental regulators, U.S. states and dealers

Automotive News Europe contributed to this report.