Former Volkswagen CEO charged with fraud in 'dieselgate'

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The U.S. Department of Justice unsealed an indictment today charging former Volkswagen AG leader Martin Winterkorn with conspiracy and wire fraud linked to the automaker's effort to cheat U.S. diesel emissions standards.

The unsealed indictment from a United States district court in MI - the state where VW's local engineering and environmental office was located - contained some damning accusations.

In a statement, Volkswagen said it continues to cooperate with the Justice Department in the investigation but added it would be "inappropriate to comment on individual cases". One VW executive has been convicted in the U.S.so far, while five others have been charged.

The indictment alleges that by the summer of 2015, U.S. regulators threatened to withhold authorization for VW to sell Model Year 2016 diesel vehicles in the United States until VW answered their questions about the discrepancies uncovered by the ICCT study. The charging and prosecution of CEOs in major corporate scandal or crisis is rare, a precedent set by the United States federal government after the 2007 financial crisis.

Winterkorn is alleged to have conspired with other top Volkswagen bosses to defraud the USA government and consumers with false claims that the company was complying with the Clean Air Act.

Former VW CEO Martin Winterkorn resigned after claiming to have no knowledge of the diesel cheat devices. He becomes the ninth person worldwide charged by USA prosecutors in the emissions scandal.

It includes three counts of wire fraud related to that scheme.

According to the indictment, Winterkorn was briefed on both the emissions issue and how USA regulators were threatening to delay certifying 2016 cars for sale, at a July meeting in Wolfsburg, Germany, where the company is based.

He allegedly found out of the so-called defeat device installed in the carmaker's cars in 2014, following a study of West Virginia University's Center for Alternative Fuels, Engines, and Emissions.

Volkswagen admitted in late 2015 that it fitted as many as 11 million diesel vehicles worldwide with software that could cheat emissions tests.

The indictment also alleges that VW employees recommended the company seek to get approval for 2016 diesel models from US regulators without revealing the existence of the cheating software.

According to court documents filed in a district court in Detroit, he and a number of other executives are accused of misleading regulators. A PowerPoint presentation was allegedly created, detailing exactly how VW was deceiving regulators "including precisely what information had been disclosed to USA regulators and what information had not yet been disclosed".

The September 2015 disclosure that VW had for at least six years intentionally cheated on emissions tests did massive damage to the company's reputation around the world and prompted massive compensation and vehicle refit costs.

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