VW executive detained for role in “dieselgate’ fraud

Oliver Schmidt, was Volkswagen’s liaison with US environmental regulators and was arrested by the FBI in Florida on Saturday as he returned from a holiday in the US.  After a bail hearing in Miami court on Monday, the a judge remanded Schmidt into custody as a flight risk.  See:  Volkswagen bosses avoiding US after arrest of executive in ‘dieselgate’ scandal:

US authorities allege that Mr Schmidt and colleagues briefed VW executives at the company’s Wolfsburg base in mid-2015 about the “existence, purpose and characteristics” of “defeat devices”, which allowed diesel cars to work out when they were being checked for emissions.

These defeat devices then turned on pollution controls, which were not used in normal on the road driving, meaning that VW cars pumped out almost 40 times the permitted amount of emissions.

The US case alleges the car maker decided to cover up the deception, rather than come clean to the authorities.

The lawsuit said: “VW employees assured executive management that US regulators were not aware of the defeat device… Rather than advocate for disclosure of the defeat device to US regulators, VW executive management authorised its continued concealment.”

This case could be a model for prosecution of the many other executives at large companies (especially investment banks) who have aided, abetted and knowingly profited from fraud and other securities crimes the past few years. Illegal actions have been a booming and extraordinarily lucrative business model for the c-suite and politicians.

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