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Volkswagen manager jailed for 7 years in diesel scam

DETROIT — A judge on Wednesday sentenced a Volkswagen senior manager to seven years in prison for covering up a scheme to evade pollution limits on U.S. diesel vehicles, calling it an astonishing fraud on American consumers.

Oliver Schmidt, who is the second person to be sent to prison over the scandal, was dispatched to the U.S. from Germany in 2015 to meet with suspicious California regulators. But he didn't disclose rogue software that had long fooled authorities into believing that VW was meeting emissions rules on nearly 600,000 vehicles. He also misled American investigators and destroyed documents.

"I'm sure, based upon common sense, that you viewed this cover-up as an opportunity to shine — to climb the corporate ladder at VW," U.S. District Judge Sean Cox said. "Your goal was to impress senior management."

The judge called Schmidt, who had led VW's engineering and environmental office in Michigan for three years, a "key conspirator" in the deception.

"Without trust in corporate America," Cox said, "the economy can't function."

The diesel vehicles were programmed to trigger certain pollution results only during testing, not during regular road use. The plan was hatched in 2006, and the vehicles were marketed as "clean diesel." Justice Department prosecutor Ben Singer called it the "height of irony."

Image: Oliver Schmidt
Oliver Schmidt Joe Wilssens / EPA file

Schmidt, 48, was arrested in Miami in January while trying to return to Germany after a vacation. He's been in custody without bond.

"For the disruption of my life, I only have to blame myself. ... I accept the responsibility for the wrong I committed," Schmidt told the judge. "I made bad decisions and for that I am sorry."

Schmidt was charged with 11 felony counts and federal prosecutors said he could have faced a maximum of up to 169 years in prison. As part of his guilty plea, prosecutors agreed to drop most of the counts and Schmidt consented to be deported at the end of his prison sentence.

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Engineer James Liang cooperated with the FBI and was sentenced to 40 months in prison last summer. Six others at VW or Audi were charged, but they are in Germany and out of reach of U.S. authorities. Among them is Heinz-Jakob Neusser, who was described as Schmidt's boss. He was head of engine development and, later, VW brand development.

VW pleaded guilty as a corporation in March and agreed to pay $4.3 billion in civil and criminal penalties on top of billions more to buy back cars.

Volkswagen rebounded from the scandal during the past year. Chief Executive Matthias Mueller last month predicted record deliveries of vehicles for the company this year.