Volkswagen Must Pay $2.8 Billion Criminal Fine for Cheating on Emissions Tests

Logo of German car maker Volkswagen (VW) is pictured on a VW car during the shareholders’ annual general meeting of VW in Hanover, central Germany, on May 5, 2015. German auto giant Volkswagen held its first ordinary shareholders’ annual general meeting since a bitter power struggle at the top of the company led to the resignation of VW patriarch Ferdinand Piech as supervisory board head. (Photo credit should read JOHN MACDOUGALL/AFP/Getty Images)

Volkswagen must pay a $2.8 billion criminal fine for purposely building a diesel engine equipped with software to cheat on greenhouse gas emissions tests.

U.S. District Judge Sean Cox accepted a $4.3 billion plea agreement reached in January between the automaker and the federal government that includes the fine. He sentenced the company to three years of probation and accepted the appointment of a federal monitor to oversee the automaker’s compliance with federal regulations.

Cox said the $2.8 billion criminal penalty is large enough, even though Volkwagen’s offenses, spanning a decade, were intentional as the automaker sold more than 590,000 vehicles with diesel engines that spewed emissions far above acceptable federal levels.

“This is a case of deliberate, massive fraud perpetrated by VW management,” Cox said. “This case also involves a failure of the VW supervisory board, which is government, labor and shareholders.”

The $4.3 billion settlement was reached in January between Volkswagen and the U.S. Justice Department. By imposing the fine and accepting Volkswagen’s agreement to be overseen by a federal monitor, the judge accepted the deal between the government and the company.

Lawyers for the U.S. Department of Justice argued a month ago that the $4.3 billion settlement was adequate even though it was only a fraction of the penalty U.S. law allowed. That penalty had a range of $17 billion to $34 billion.

U.S. Attorney John Neal argued in March that the lower figure was appropriate because Volkswagen went to great lengths to cooperate with the government and move the investigation along swiftly after the U.S. Environmental Protection Agency charged the automaker with wrongdoing in September 2015.

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SOURCE: USA Today; Detroit Free Press, Brent Snavely

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