Oliver Schmidt, VW Senior Manager
Pleads Guilty in Connection With Conspiracy to Cheat U.S. Emissions
August 04, 2017
former general manager of Volkswagen AG’s (VW) U.S. Environment and
Engineering Office, who was a senior aide to VW’s head of engine
development, pleaded guilty today for his role in violating the Clean
Air Act in connection with VW’s sales of “clean diesel” vehicles in the
Acting Assistant Attorney General Kenneth A. Blanco of the Justice
Department’s Criminal Division, Deputy Assistant Attorney General Jean
E. Williams of the Justice Department’s Environment and Natural
Resources Division, and Acting U.S. Attorney Daniel L. Lemisch of the
Eastern District of Michigan made the announcement.
Oliver Schmidt, 48, a citizen and resident of Germany, pleaded guilty to
one count of conspiracy to defraud the U.S., to commit wire fraud and to
violate the Clean Air Act; and to one count of violating the Clean Air
Act. He was indicted by a federal grand jury on January 11, along with
five other VW executives and employees. The case is assigned to U.S.
District Judge Sean F. Cox of the Eastern District of Michigan, who
accepted Schmidt’s plea today. Sentencing has been scheduled for
“Today’s guilty plea by a VW senior manager follows the successful
prosecution of the company earlier this year and of another VW engineer
in 2016,” said Acting Assistant Attorney General Blanco. “The Criminal
Division is committed to holding both corporations and individuals
accountable to the rule of law, and to protecting U.S. consumers and the
environment. This case is a great example of this important commitment.”
“Schmidt participated in a fraudulent VW scam that prioritized corporate
sales at the expense of the honesty of emissions tests and trust of the
American purchasers,” said Deputy Assistant Attorney General Williams.
“Schmidt along with each and every official involved in this emissions
scandal will be held fully accountable for their actions by the
Department of Justice as this investigation continues.”
“We hope this prosecution sends a message of the importance the U.S.
Attorney’s Office places on protecting the environment,” said Acting
U.S. Attorney Lemisch. “Where criminal charges are appropriate, we will
prosecute both corporations and individual employees who pollute and
illegally evade our clean air laws.”
As part of his guilty plea, Schmidt admitted that he agreed with other
VW employees to mislead and defraud the U.S. and domestic customers who
purchased diesel vehicles, and to violate the Clean Air Act. In the
spring of 2014, a non-governmental organization in the U.S. published
results of a study that showed substantial discrepancies in nitrogen
oxide (NOx) emissions from certain VW vehicles when measured on the road
compared to standard drive cycle tests. During the summer of 2015,
Schmidt was told of the existence of cheating software in certain VW
diesel vehicles that had been in place for years that would cause the
vehicles to emit substantially higher amounts of NOx when the software
detected that the car was not being tested, he admitted.
Schmidt admitted that he participated in discussions with other VW
employees in the summer of 2015 to determine how to respond to questions
from U.S. regulators about VW’s diesel vehicles without revealing the
defeat device. After a meeting with VW management in July 2015, VW
management instructed Schmidt to seek a meeting with a senior employee
of the California Air Resources Board (CARB) and to obtain approval from
CARB for the sale of additional VW diesel vehicles in the U.S. without
disclosing the fact that VW was cheating on emissions tests. Schmidt
admitted following VW management’s instructions. During two meetings in
August 2015, Schmidt attempted to obtain approval for the sale of
additional VW diesel vehicles by responding to questions from CARB
without revealing what he knew was the truth – that the real cause for
the vehicles’ substantially higher emissions on the road was that VW had
intentionally installed software designed to cheat and evade emissions
testing, he admitted.
further admitted that he knew that in August 2015 VW employees submitted
to the U.S. Environmental Protection Agency (EPA) two reports pursuant
to the Clean Air Act that were fraudulent and misleading. Moreover,
Schmidt knew that VW was falsely marketing diesel vehicles to the U.S.
public as being environmentally friendly and compliant with U.S.
environmental regulations, including by promoting increased fuel
economy, he admitted.
As part of his guilty plea, Schmidt agreed that during his participation
in the scheme, he and his co-conspirators caused losses to victims of
more than $150 million and that he obstructed justice.
The case is being investigated by the FBI’s Detroit Field Office and the
EPA’s Criminal Investigation Division, with assistance from Homeland
Security Investigations. Securities and Financial Fraud Unit Chief
Benjamin D. Singer and Trial Attorney David M. Fuhr of the Fraud Section
of the Justice Department’s Criminal Division; Senior Trial Attorney
Jennifer Blackwell of the Environmental Crimes Section of the Justice
Department’s Environment and Natural Resources Division; and White
Collar Chief John K. Neal of the U.S. Attorney’s Office of the Eastern
District of Michigan are prosecuting the case.