DETROIT -- Volkswagen executive Oliver Schmidt will remain behind bars as an extreme flight risk even after not-guilty pleas were entered on his behalf during his arraignment Thursday in U.S. District Court in Detroit.
Schmidt, 48, faces 11 felony counts in connection with VW’s nearly decade-long effort to subvert U.S. environmental regulations when it came to the company’s diesel-powered vehicles. If convicted, he could face up to 169 years in federal prison, prosecutors said in January.
Schmidt was arrested Jan. 7 at Miami International Airport as he was trying to fly home to his native Germany after a family vacation. He was one of seven current and former VW executives charged so far in the ongoing case, though the other five remain outside the reach of U.S. law enforcement in Germany. The German government rarely extradites its own citizens to face charges in foreign countries.
A U.S.-based engineer, James Liang, pleaded guilty in September to conspiring to defraud regulators and is cooperating with the investigation. His sentencing is set for May.
In court Thursday afternoon, Schmidt, appearing before U.S. Magistrate Judge Steven Whalen, was clad in red prisoner jumpsuit and was shackled at the wrists and ankles.
Schmidt’s attorney, David DuMouchel, asked Whalen if Schmidt could be transferred from the county jail to a federal facility in nearby Milan, Mich. He also asked that Schmidt be given access to his prescription glasses, and that he be allowed to take his medicine to fight a case of shingles.
“This is a very paper-intense matter,” DuMouchel said. Whalen didn’t rule on the transfer. The judge, noting that he doesn’t have the authority to
assign a defendant to a particular prison, said he is recommending that Schmidt be sent to Milan.
DuMouchel told reporters he will seek bond for his client, who has been in federal custody since his January arrest. DuMouchel declined to comment on whether Schmidt will cooperate with prosecutors.
Schmidt, who at one time was responsible for overseeing U.S. emissions compliance for VW, was the lead executive from 2012 to 2015 of VW Group of America’s Engineering and Environmental Office in Auburn Hills, Mich. In that role, it was he who had sought certification of VW’s dirty diesels to keep them on sale in the U.S.
In April 2014, Schmidt was notified that independent testing at West Virginia University had discovered that VW diesel vehicle emissions vastly exceeded federal standards. Investigators say he sounded the alarm bells within the automaker the same day, writing to a colleague: “It should first be decided whether we are honest. If we are not honest, everything stays as it is.”
Schmidt's current employment status with VW is not known. At the time of his arrest last month, prosecutors said in court papers he was still employed by the automaker.
“Volkswagen continues to cooperate with investigations by the Department of Justice into the conduct of individuals," VW said in a statement on Thursday. "It would not be appropriate to comment on any ongoing investigations or to discuss personnel matters."
VW has agreed to a $4.3 billion settlement in the U.S. for the diesel emissions scandal, which continues to rock the German automaker, as well as pose significant legal exposure for its top current and former executives. The ongoing scandal could ultimately cost the company more than $23 billion in fines, recalls and buybacks in the U.S. and Canada.
Bloomberg contributed to this report.
Editor's note: The name of attorney David DuMouchel was misspelled in earlier versions of this story.
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