VW Executive Arrested In Connection With ‘Dieselgate’ Scandal

Five months after investigators found evidence of criminal behavior at Volkswagen tied to “Dieselgate,” one executive with the carmaker has been arrested. 

The New York Times, citing sources close to the matter, reports that the FBI arrested Oliver Schmidt, a former executive with VW’s regulatory compliance office, over the weekend. Authorities charged Schmidt with defrauding the U.S. government.

Schmidt, who worked in the compliance office from 2014 until March 2015, reportedly played a central role in trying to excuse the findings of the West Virginia study that first found VW vehicles included so-called “defeat devices” that skirted federal emissions standards.

The software was first detected during independent analysis by researchers at West Virginia University who were working with the International Council on Clean Transportation, a non-governmental organization. The findings raised questions about emissions levels, and the EPA, along with the California Air Resources Board, began further investigations into the issue.

For his part, the Times reports, that after the study was released in 2014, Schmidt tried to convince regulators that excess pollutants released by the vehicles when not undergoing emissions testing were the result of a technical issue, not any deliberate deception by the carmaker.

Months after Schmidt’s explanations, VW admitted that more than 500,000 of its vehicles in the U.S. and more than 11 million across the world, were equipped with the defeat devices that allowed as much as 40 times the allowable rate of nitrogen oxide to be emitted during regulator driving.

A spokesperson for VW said in a statement to the Times that the company continues to cooperate with the Department of Justice, but it could not comment on any ongoing discussions or personnel matters.

The Times reports that Schmidt’s arrest occurred as the Department of Justice and VW continue talks on a reported $2 billion deal that would resolve the government’s criminal investigation into Dieselgate. That deal, which is expected in the next week, would likely see one of VW’s corporate entities pleading guilty to charges.

The arrest is at least the second of a Volks-villian. In Sept. 2016, James Liang, who worked at the carmaker in Germany and the U.S., pleaded guilty to conspiring to defraud regulators and customers.

Liang, who agreed to cooperate with the U.S. investigation into VW, was previously named as a developer of the defeat device in a lawsuit filed by New York Attorney General Eric Schneiderman in July.